Verification of Records

Errors Revealed by the Trial Balance — The Suspense Account

When the trial balance does not balance, a suspense account is opened with the difference as a temporary balancing figure. It is cleared as errors are found and corrected.

Types of Error That Create a Suspense Account

Opening and Using the Suspense Account

1. Extract the trial balance — DR total ≠ CR total
2. Find the difference between the two totals
3. Open a suspense account and enter the difference on whichever side makes it balance

Example: DR total = £84,300; CR total = £83,700 → difference = £600

• Suspense account: CR £600 (entered on the smaller side so TB now balances)

Clearing the Suspense Account

Each journal correction involving the suspense account reduces its balance. When all errors are corrected, the suspense account balance = £0 and it is closed.

Example corrections:

Rule: the suspense account is always the other side of a correction when only one side of the original entry was wrong or missing.

Summary

• Suspense account is temporary — it should have a zero balance once all errors are corrected
• It appears on the trial balance and in the statement of financial position (either as a current asset or current liability depending on the balance) until cleared
• Clearing the suspense account does NOT automatically restore the accuracy of the accounts — each underlying error must also be corrected