Unless the difference in the Trial Balance is quickly located, it is usual to put the difference to a suspense Account in order, at least, to make the trial balance balanced. If debit side exceed the credit side the suspense Account would appear only credit balances and vice versa. It should be noted that the difference in the trial balance is due to the type of mistake which affect only one Account such as wrong posting of an Account, mistake in totaling a subsidiary books etc.
A suspense Account, therefore, is an Accourtt in which those transactions are entered, which cannot be placed to their proper Accounts for want of information. Suppose goods were purchased from a per..,_ n but the book keeper forgot to enter the name of the person “To Suspense Account” this suspense Account will be opened in the ledger and it is credited with the amount of the goods purchased. When the name of the person is known an entry will be passed to transfer the amount from the suspense Account to the Account of the person from whom the goods were purchased.
When the difference in a Trial Balance is put to suspense Account, the Account to be corrected will be debited or credited as the case may be, and the Journal Entry will be completed by crediting or debiting the suspense Account. When all the mistakes have been corrected, the suspense Account will show nil balance.
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