Question

Answer the question.
What is Suspense Account?

Answer 1

Suspense account is an account which is opened to avoid delay in the preparation of final accounts. Sometimes, because of an error, the trial balance does not match. If the error in the trial balance is not located, then this may cause delay in preparing final accounts. To avoid that delay, difference in the trial balance is transferred to the suspense account. Suspense account will show nil balance when all the errors have been located and rectified.