suspense account

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Suspense account

An account used temporarily to record receipts and disbursements that have yet to be classified.

Suspense Account

1. A brokerage or some other account in which an investor deposits securities or cash while he/she decides how to invest it. A suspense account is, by definition, low-risk, as the investor has no intention of losing the deposit while making appropriate investment decisions.

2. An account in which a company deposits and withdraws funds for transactions that have not yet been completed. A suspense account exists in order to keep ongoing transactions off of a balance sheet.

suspense account

In accounting, a temporary “parking place”for entries one does not know how to classify.

Example:  An apartment project receives a cash rent payment left in its mailbox. There is no indication of the name of the tenant, so the manager cannot post the payment to any particular account. Because of the software accounting system, however, the manager cannot create a deposit slip for the payment unless there is a tenant account. To solve the problem, the manager posts the payment to the suspense account, where it will stay temporarily until someone can find out the tenant's name.

References in periodicals archive ?
Let's work through a typical example involving suspense accounts to show how to tackle such questions in the exam.
A suspense account is a temporary account in the nominal ledger that is used in two main situations.
positive amounts offsetting negative amounts) at lower level accounting sites before they were recorded in the suspense accounts.
If left unchecked, Pyland believed, the suspense account would grow exponentially and the bailout could fall apart before it began.
Royalty suspense accounts, for example, may provide attractive unclaimed property audit targets to state governments looking for new, non-tax revenue sources.
5 per cent, the extra funds in the interest suspense accounts have enabled the board of trustees to go in for a bigger hike.
In addition, these issues caused an increase in call volumes, which resulted in excessive hold times and abandonment rates, funds placed in suspense accounts that were either preventable and/or should have been resolved more timely, and the charging of unwarranted fees.
Each of them refer to large sums of money which is being held in suspense accounts which are either unknown to the government of that country or contrary to the laws of that country.