why do we open suspense a/c?

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  • 4

Suspense A/cs are used in various accounting situations. I assume that you are particularly concerned with the chapter on Trial Balance.


We know that the total of all debits is equal to the total of all credits. So, in trial balance, the "Dr." coloumn total must be equal to the "Cr." coloumn total. But sometimes totals of both the coloumn doesn;t equalize.


The reason for this may be some mistake(s) made while recoding the amounts from vouchers in Journal, posting to the Ledger. An omission of debiting or crediting an account or both may be made. It may also be that there is no such omission, but the wrong amounts are posted or to wrong accounts, etc.


So, the reason of non-equality has to be investigated before preparing financial statements. However, sometimes the reason doesn't seem to be clear, but the accountant has to prepare a trial balance.


In such situation, the difference between the "Dr." and "Cr." coloums is put in a Suspense A/c, which is opened specially for this purpose. It means that with the help of a Suspense A/c, the trial balance is balanced artificially (because the reason of difference is still unknown).


After that the investagation is made to analysis the causes of difference and as soon as they ae known the respective amounts are removed from the Suspense A/c. When all the causes are ascertained, there will be no balance remaining in the Suspense A/c.

  • 1

thanks :)

while rectifying one sided errors..how can we get to knw tht suspense a/c shud b debited or credited?

  • -2

A Suspence Account is a temporary ledger account, which is opened when the debit side and the credit side of the trail balance does not tally. In other words,it is opened in the shorter side of the trail balance.

Suspence account is opened for the following reasons:

  1. Tallying the trail balance: When the trail balance disagree, the suspence account is prepared in the shorter side of the trail balance.
  2. Location of error: Suspence Account helps in the location of the error as it helps the accountant to find the error omitted in the past.

Hope it helps..

  • 0

>> First identify the account in which the mistake is made.


>> Then, make it clear to you that what should be done with that account and what is actually done. For ex., whether that account should be debited or credited and with what amount.


>> Now, ascertain that what should you do now to that account to make it correct and the entries and posting complete.


>> If the above account is to be debited, then credit the Suspense A/c and vice versa.

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