Suspense Account

Sometimes, trial balance does not agree due to some errors which have not been found yet. At the same time, if we are required to prepare final acounts as soon as possible, the trial balance is rectified temporally by writing amount in lighter side under the name of 'Suspense Account'. If the credit side is short, the suspense account will be credited and if the credit side is bigger, this account will be debited. The amount standing to the debit or credit of suspense account represents the net effect of one sided error.

Posted in Accounting Errors