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Suspense Account

Sir, what is the meaning of suspense account. Is this account treated as a balancing figure in every trial balance? Explain with the help of an example.

asked Aug 22, 2015 in Rectification of Errors by kajol kumari (22 points) 812 views

1 Answer

0 votes

Sometimes when we are not able to tally our Trial Balance, we place the difference in the Suspense A/c. This means a Suspense A/c is used to balance a Trial Balance, till we are able to locate the error and pass the journal entry with the help of Suspense A/c.

For example, the debit side of your Trial Balance exceeds the credit side by Rs.1000, then you can place Rs.1000 at the credit side of Suspense A/c and temporarily tally your Trial Balance. When you are able to locate the cause of the difference in the Trial Balance, then pass Journal entry with the help of Suspense A/c.  This is so because only the One-Sided errors cause the difference in the Trial Balance.  For example you find out that the amount of Rs.1000 which you have placed at the credit of Trial Balance was actually received from Mr. Ramesh, a debtor. But while doing posting you omitted to post it to Mr. Ramesh's A/c.   This is a one-sided error and it will be rectified by passing a journal entry as given below:

Suspense A/c    Dr.     1000

  To Ramesh A/c                     1000

With the passage of this entry, your trial balance will tally and suspense account will show zero balance.

answered Aug 22, 2015 by jbsclasses (3,971 points)