Accounting entries for the correction of errors

NotesQuizObjective Test

Suspense Accounts

The difference in the debits and credits of a trial balance can be posted to a suspense account, after this, the reason for the difference is found and then adjustments are made. 

A suspense account is a temporary account. It never appears in the final accounts.

It is used for two main reasons:

  1. To account for a debit or credit entry when the accountant is unsure as to where it should go

  2. To make a preliminary trial balance balance when an error has been detected.

Steps to clear a suspense account

  • Determine the original accounting entry which was made.

  • Decide what entry should have been made.

  • Make the required adjustment.

NotesQuizObjective Test