Suspense account

A one-sided error affects only one account, so the trial balance does not agree. Finding every error may take time, but the work cannot stop. So the difference is put on the shorter side of the trial balance as a Suspense Account, and the trial balance is made to agree for now.

A suspense account is a temporary account, a parking place for the unexplained difference. As each one-sided error is found, the rectifying entry uses Suspense for the side that has no other account to fix.

• Credit sales of ₹10,000 recorded correctly in Sales, but not posted to Mohan's account. Mohan needs a debit; no other account is wrong: Mohan A/c Dr, To Suspense A/c ₹10,000.
• Posted to Mohan as ₹12,000 instead of ₹10,000. Mohan has ₹2,000 too much debit: Suspense A/c Dr, To Mohan A/c ₹2,000.
• Sales returns of ₹1,600 credited to Megha as only ₹1,000. Megha needs ₹600 more credit: Suspense A/c Dr, To Megha A/c ₹600.

Casting errors in special books are one-sided too. If the purchases book is overcast by ₹1,000, the suppliers' accounts are all correct; only the Purchases account, which receives the book's total, got ₹1,000 too much: Suspense A/c Dr, To Purchases A/c ₹1,000.

Errors of principle and other two-sided errors never go through Suspense.

When all the errors are found, the suspense account closes with nothing left. If some errors are still not found by the end of the year, its balance is carried forward to the next year. Errors from last year that are found in the new year are corrected through a Profit and Loss Adjustment Account, because last year's accounts are already closed.