Question

Answer in one sentence only :-

When is suspense account opened?

Answer 1

When there is a mismatch between the debit and credit balances of Trial Balance, even after rechecking, the difference amount is transferred to the Suspense A/c. It is a temporary account to which the difference of the Trial Balance is transferred, in order to avoid a delay in preparation of the financial statements. If all the errors are detected and rectified, then the Suspense A/c automatically gets closed. However, if the difference still persists, it is transferred to the either side of the Balance Sheet depending on the balance (debit/credit) in the Suspense A/c. .