Tuesday, January 19, 2010

What is a Suspense Account?

Suspense accounts are opened when it is not known immediately where to post an amount. When the proper account is determined by an accountant, the suspense account is closed and the amount will be correctly posted using the correct journal entry.

If more than one error occurs during an accounting period, these errors must all be merged together in the same suspense account. Until the causes of the errors are discovered, the accountants are unlikely to know exactly how many errors there are in an account.

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