Suspense account
In one sentenceA temporary account holding an amount whose correct account is not yet known, or a difference in the trial balance, until the cause is found and the entry is corrected.
Simply put
Sometimes a deposit reaches the bank and you don't know who sent it, or the trial balance does not balance. So the books don't stall, you put the amount in the suspense account temporarily.
This account must have no balance when the financial statements are prepared. Find the cause, then move the amount to its correct account.
Worked example
The accountant of a contracting business prepared the trial balance and found debits greater than credits.
Total debit balances250,000 SAR
Total credit balances248,500 SAR
Difference: 250,000 − 248,5001,500 SAR
The difference is recorded temporarily on the credit side of the suspense account until its cause is known1,500 SAR
Don't confuse it with
Clearing accountA clearing account is a normal part of a known process, while a suspense account is a sign of missing information or an error.