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Bookkeeping and accounting

Question asked by aryeeteyscholes - May 18, 2017
Question

Hi,

What is a suspense account and what are the functions?

response from Dalila Boinay
- May 23, 2017

Hi,

A suspense account is used to record certain amounts on a temporary basis. Eventually, all amounts recorded in the suspense account will be shifted to another account.

The suspense account is generally used when the appropriate account could not be determined at the time of the transaction. Transaction coud be the result of a partial payment which can't be offset against a sales invoice. For as long as a transaction is found in a suspense account and has not yet been transferred to its proper home, that transaction is "in suspense" - the suspense account acting then as a "holding account" for the transaction.

Hope this helps

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