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Suspens account
a SUSPENSE ACCOUNT CAN BE ANYTHING IKE ASSET, LIABILITY, EXPENSES AND INCOME. ONCE YOU TRANSFER A TRANSACTION, IT SHOULD BE CARRIED FORWARD TO THE NEXT PERIOD. IF CAPITAL ACCOUNT HAS A SUSPENSE ENTRY, THEN YOU CAN TRANSFER IT TO SUSPENSE ACCOUNT. EXAMPLE,
SHARE ISSUED TO RAM WORTH 500 AND UNDER SUSPENSE ACCOUNT NOT KNOWING WHO PAIDUP FOR THE SHARES,
BANK A/C 500
TO SUSPENSE A/C 500
WHEN YOU SORT THIS PROBLEM AND FINDS THAT RAM GAVE THAT MONEY
SUSPENSE A/C 500
TO CAPITAL A/C 500
like we forgot to pay amount to some one or we get amount from some one so we will have to find to clear that amount or Suspense as its a correct way rest at the time of closing or finalising of account then we decide where we can do adjustment at last
Then it means it is either a purchase return, gain or capital received. You have to find out what it is and rename suspense account to the relevant account. My second entry doesn’t mean you can debit the Suspense to statement, it is just a representation that debit takes out Suspense account and replaces it with Ram capital a/c. I heard there are some transactions which were never sorted out and the balance was in Suspense account for a long time because, they don’t known how a transaction occurred.
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