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Question
Why is a suspense account used in correcting accounting errors?
Options
To record two-sided errors
To immediately fix errors before trial balance
To temporarily hold differences from one-sided errors until located
For posting compensating errors
MCQ
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Solution
To temporarily hold differences from one-sided errors until located
Explanation:
Suspense accounts are used when the trial balance does not match due to one-sided errors, allowing the errors to be found and corrected later.
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