I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART E: PREPARING A TRIAL BALANCE 

 

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In the receivables control account in the nominal ledger, the correction would therefore appear 

as follows. 

RECEIVABLES CONTROL ACCOUNT 

  

$       

$     

Balance b/d 

 660  Suspense a/c: error corrected 

 920

Payment incorrectly debited 

    460  Balance c/d 

    200

 

 1,120  

 1,120

2.9 Use of suspense account: not knowing where to post a transaction 

Another use of suspense accounts occurs when a bookkeeper does not know where to post one side of a 

transaction. Until the mystery is sorted out, the entry can be recorded in a suspense account. A typical 

example is when the business receives cash through the post from a source which cannot be determined. 

The double entry in the accounts would be a debit in the cash book, and a credit to a suspense account. 

2.10 Example: not knowing where to post a transaction 

Windfall Garments received a cheque in the post for $620. The name on the cheque is R J Beasley,  

but Windfall Garments have no idea who this person is, nor why they should be sending $620. The 

bookkeeper decides to open a suspense account, so that the double entry for the transaction is: 

DEBIT Cash 

$620 

 

CREDIT Suspense 

a/c 

 

$620 

Eventually, it transpires that the cheque was in payment for a debt owed by the Haute Couture Corner 

Shop and paid out of the proprietor's personal bank account. The suspense account can now be cleared, 

as follows. 

DEBIT Suspense 

a/c 

$620 

 

CREDIT Trade 

receivables 

 

$620 

2.11 Suspense accounts might contain several items 

If more than one error or unidentifiable posting to a ledger account arises during an accounting period, 

they will all be merged together in the same suspense account. Indeed, until the causes of the errors are 

discovered, the bookkeepers are unlikely to know exactly how many errors there are. An examination 

question might give you a balance on a suspense account, together with enough information to make the 

necessary corrections, leaving a nil balance on the suspense account and correct balances on various 

other accounts. In practice, of course, finding these errors is far from easy!