suspense account
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Suspense account
An account used temporarily to record receipts and disbursements that have yet to be classified.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.