Suspense Accounts

• The purpose of the trial balance is to ensure that the double-entry process has been done correctly.
• When you generate the trial balance, you may discover that there is an imbalance on the debit or credit side. This may be due to:

  • •one sided entry in the ledger accounts
  • •entry duplicated on one side of the ledger accounts, no entry on the other side
  • •unequal entries in the ledger accounts
  • •ledger account balance incorrectly transferred to the trial balance
  • •ledger account balance omitted.
• The imbalance in the trial balance will automatically generate a suspense account. This will need to be investigated and appropriate adjustments will need to be made.
• The suspense account is like a holding account for transactions that have not been correctly related to the right income or expense accounts. There is no room in our financial statements for suspense items. These items should be investigated and cleared at the end of each month and in particular at year end