Definition of Suspense account:
A suspense account is a section of a general ledger where an organization records ambiguous entries that still need further analysis to determine their proper classification and/or correct destination. In the context of investing, a suspense account is a brokerage account where an investor temporarily parks his cash until he can deploy that money towards the purchase of new investments.
An account in the books of an organization in which items are entered temporarily before allocation to the correct or final account.
Temporary account (one not included in financial statements) created to record (1) disbursements or receipts associated with yet-unconcluded transactions until their conclusion, or (2) discrepancies between totals of other accounts until their rectification or correct classification.
Suspense accounts contain entries where there are uncertainties or discrepancies. For example, if an individual makes a deposit but accidentally writes down an account number incorrectly, that money will be housed in a suspense account until the error is corrected. In another scenario, a customer may issue a payment, but fail to specify which invoice he intends to pay off with those funds.
How to use Suspense account in a sentence?
- You should try to keep a suspense account in place if there was a misunderstanding with another business and you may owe more.
- We had a suspense account created and I informed everyone that it was only for a certain amount of time.
- Suspense accounts are routinely cleared out once the nature of the suspended amounts are resolved, and are subsequently shuffled to their correctly designated accounts.
- Suspense accounts are frequently used by mortgage lenders when a borrower accidentally falls short on a monthly payment, or if a borrower chooses to break up the monthly payment obligation into partial amounts.
- You may want to keep some money in a suspense account if you think you may need to come up with some quick cash soon.
- Now the contract has been completed and the original contractor has since been paid, but the contract balance of US $38 million has been left in a suspense account with the Central Bank of Nigeria.
- In investing, suspense accounts hold an investor's money until it can be reinvested.
- A suspense account is a catch-all section of a general ledger used by companies to record ambiguous entries that require clarification.
Meaning of Suspense account & Suspense account Definition