How do you show a suspense account on a balance sheet?

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Solution

In the event that a suspense account isn’t shut towards the end of a bookkeeping period, the remaining or the balance amount from the suspense account is displayed on the assets side in the balance sheet with a debit balance. If there should arise an occurrence of a credit balance, it is displayed on the liability side of a balance sheet.

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What is a suspense account? Is it necessary that suspense account will balance off after rectification of the errors detected by the accountant? If not, then what happens to the balance still remaining in suspense account?

Q. There was an error in the Trial Balance of Mr. Steel on 31st March, 2015, and the difference in Books was carried to a Suspense Account. On going through the Books you find that:
(i) ₹ 5,400 received from Mr. A was posted to the debit of his account.
(ii) ₹ 1,000 being purchases return were posted to the debit of Purchases Account.
(iii) Discount received ₹ 2,000 was posted to the debit of Discount Account.
(iv) ₹ 2,740 paid for Repairs to Motor Car was debited to Motor Car Account as ₹ 1,740.
(v) ₹ 4,000 paid to B was debited to A's Account.
Give Journal Entries to rectify the above errors and ascertain the amount transferred to Suspense Account on 31st March, 2015 by showing the Suspense Account, assuming that the Suspense Account is balanced after the above corrections.

The Debentures Suspense Account will appear on the ___side of the balance sheet.

Q. If Trial Balance shows excess credit, suspense account will show a debit balance.

Q. If the trial balance shows a short credit the suspense account will have a ________ balance.

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