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Suspense Accounts is maintained for the entries in which one head is unknown and later should be rectified if it is disclosed. if both head of accounts are unknown then it is not recorded. Suspense is not a favorable account for the business, normally dull accountants post many entries which makes problems.
A suspense account is an account in the general ledger that temporarily stores any transactions for which there is uncertainty about the account in which they should be recorded. Once the accounting staff investigates and clarifies the purpose of this type of transaction, it shifts the transaction out of the suspense account and into the correct account(s). An entry into a suspense account may be a debit or a credit
It is useful to have a suspense account, rather than not recording transactions at all until there is sufficient information available to create an entry to the correct account(s). Otherwise, larger unreported transactions may not be recorded by the end of a reporting period, resulting in inaccurate financial results.
The account which is opened to make the debit balance and the credit balance in the trial balance equal is known as Suspense Account. It is kept the dr side of trial balance if credit side has more amount and vice- versa for the other side.It is an artificial account which makes debit total equals to credit total in the trial balance. It is removed as soon as the mistakes found out from the ledger accounts.
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