Suspense Account

When a Trial Balance fails to agree, the difference indicates that at least one error exists that affects only one side of the books (unlike the errors in the previous section, which leave the Trial Balance unaffected). Rather than delay preparing the Final Accounts while the actual error is searched for, the difference between the two Trial Balance totals is temporarily placed in a Suspense Account, on whichever side makes the Trial Balance agree.

As each underlying error is later located and corrected through a proper rectifying journal entry, the Suspense Account is written down accordingly. Once every error causing the original disagreement has been found and corrected, the Suspense Account balance becomes nil, and it disappears from the books entirely — it is only ever a temporary, holding account, never a permanent one. …