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Chapter: 11th Accountancy : Rectification of Errors

Suspense account

1. Meaning of suspense account 2. Preparation of suspense account

Suspense account

 

1. Meaning of suspense account

When the trial balance does not tally, the amount of difference is placed to the debit (when the total of the credit column is higher than the debit column) or credit (when the total of the debit column is higher than the credit column) to a temporary account known as ‘suspense account’.

 

2. Preparation of suspense account

Suspense account will remain in the books until the location and rectification of errors. After rectifying the errors and posting the rectification entries to the respective ledger accounts, the suspense account appearing in the ledger is to be balanced. If all the errors are located and rectified, the suspense account gets closed.

 

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