Home » Opinion » Suspense accounts and error correction
Suspense accounts and error correction are popular topics for examiners because they test understanding of bookkeeping principles so well. A suspense account is a temporary resting place for an entry that will end up somewhere else once its final destination is determined. There are two reasons why a suspense account could be opened:

Suspense accounts and error correction

Suspense accounts and error correction are popular topics for examiners because they test understanding of bookkeeping principles so well.

A suspense account is a temporary resting place for an entry that will end up somewhere else once its final destination is determined. There are two reasons why a suspense account could be opened:

  1. a bookkeeper is unsure where to post an item and enters it to a suspense account pending instructions
  2. there is a difference in a trial balance and a suspense account is opened with the amount of the difference so that the trial balance agrees (pending the discovery and correction of the errors causing the difference). This is the only time an entry is made in the records without a corresponding entry elsewhere (apart from the correction of a trial balance error – see error type 8 in Table 1).
Table 1: Types or error

Leave a Reply