Suspense Account

A ledger account in which entries are made on a temporary basis when the correct account cannot be immediately identified is called suspense account.

Examples: 

i)  Transfer or balance to the wrong column of the trial balance.

ii)  Omission of balance from trial balance.

iii)  Wrong casting of trial balance.

 A suspense account may be a temporary resting place for associate degree entry end up find yourself in different places once its final destination is decided. There ar 2 reasons why a accounting could be opened:
 

1. a comptroller is unsure wherever to post an item and enters it to a accounting unfinished directions
   
2. there is a difference in a very balance and a accounting is opened with the number of the difference so the balance agrees (pending end up and correction of the errors inflicting the difference).

Characteristics / Feature of Promissory Note

1. The instrument must be in writing. It can't be verbal.

2. It must be signed by a maker who should be a definite and definite person. A rubber stamp signature or maybe a signature in pencil that is valid. an agent can even sign a note on behalf of the firm having the authority.

3. It should contain an unrestricted promise to reimburse a definite amount of cash solely. the number of cash must be sure and definite.

4. The promise should be expressed. It can’t be implied.

5. The note should to be paid on demand or at a set future date.

6. It must be owed to a specific person or to the ordered person. The receiver must be sure.

7. The note may be created by two or more persons who may be susceptible to pay the certain quantity jointly.

8. It should be sealed according to the Law of statute.

9. The medium of payment should be in cash.

Difference between Bill of Exchange and Promissory Note

A bill of exchange is different from a promissory note on the following paragraph:

Promissory Note	Bill of Exchange
promissory note is promise to pay	Bill of exchange is an order to pay
In promissory note there are only two parties the drawer, and the payee involved.	In Bill of exchange there are three parties, the drawer, the drawee, and the payee.
In promissory note there is no necessity of acceptance of Promissory Note	Bill of exchange must be accepted
The maker is primarily liable for promissory note	In Bill of exchange, The drawer is not primarily liable.
promissory note is never drawn in sets	Foreign Bills of exchange are specially drawn in sets.
Protesting is not necessary after dishonour of promissory note	A foreign Bill of exchange must be protested upon dishonor.

Promissory Note

Promissory note is written unconditional promise which is signed by the maker to pay certain person or to the bearer of the instrument, a certain sum of money after certain period of time.

A promissory note is a legal instrument (more particularly, a financial instrument), in which one party (the maker or issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. If the promissory note is unconditional and readily salable, it is called a negotiable instrument.

Insolvency

A situation in which liabilities exceed assets and unable to pay liabilities is called insolvent.

Insolvency is that the inability of a debtor to pay their debt. income insolvency involves a lack of liquidity to pay debts as they fall due. balance sheet insolvency involves having negative net assets, wherever liabilities exceed assets. insolvency isn't a word for bankruptcy, that may be a determination of insolvency made by a court of law with resulting legal orders meant to resolve the insolvency.

Insolvent

A person whose liabilities exceed his assets and he is unable to pay his liabilities is called insolvent.

Insolvency is that the inability of a debtor to pay their debt. income insolvency involves a lack of liquidity to pay debts as they fall due. balance sheet insolvency involves having negative net assets, wherever liabilities exceed assets. insolvency isn't a word for bankruptcy, that may be a determination of insolvency made by a court of law with resulting legal orders meant to resolve the insolvency.

Mutual Accommodation

A situation in which bill of exchange is drawn for accommodation of both drawer and drawee is called mutual accommodation.

Generally a bill of exchange is drawn by a soul on his debtor to settle a trade debt. A soul could be a person who has sold  merchandise on credit basis and a debtor could be a one who has purchased merchandise on credit basis. Thus, a bill that is drawn by a soul and accepted by a debtor is thought as a bill of exchange.