The suspense account is used to correct book-keeping error where the

Accounts - Principles of Accounts

JAMB 1994

A. amount involved is quite significant
B. item involved is not material
C. item involved is unknown
D. error does not affect the agreement of the trial balance

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Correct Answer: Option C

Explanation

Suspense accounts are used when your trial balance is out of balance or when you have an unidentified transaction. The suspense account is a general ledger account that acts as a holding account until the error is discovered or the unknown transaction is identified.

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