Suspense account
What is a suspense account?
A suspense account is a temporary account.
If the trial balance does not agree and the errors cannot be found at once, the difference is put in suspense. That makes the two columns equal.
The balance goes in the column with the smaller total.
Example
A trial balance has total debits of £18,400.00 and total credits of £18,150.00. The credits are smaller, so a suspense account is opened with a credit balance of £250.00.
Why it matters
It is opened only so that work can carry on. It must be cleared to nil before the final accounts are prepared.
Practise it
Module, 5 rooms, PremiumErrors and the suspense account
See the first roomHow to open a suspense account
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].