Suspense Account

A suspense account is a temporary ledger account used in accounting to record transactions whose proper classification is uncertain or pending verification. It acts as a balancing mechanism that allows the trial balance to remain accurate when errors, omissions, or unidentified entries arise during bookkeeping. After investigation and correction, the entries are reallocated to their appropriate accounts, and the suspense account is subsequently closed or cleared.

Example: If an accountant receives a payment without sufficient details to identify the payer, the amount is temporarily credited to a suspense account until the correct customer account is determined.