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 ?
As a result of the audit report, management has put arrangements in place to closely monitor the child care suspense account.
IRS guidance provides that the failure can generally "be corrected by reallocating all forfeitures in the plan's forfeiture suspense account to all plan participants who should have received them, had the forfeitures been allocated on time."
"The proposed delay of the rule's supervisory review provisions from the August 4, 2008 effectiveness date should allow sufficient time to evaluate interpretive issues involving supervisory review, the rule's application to non-recommended transactions, and the use of 'suspense accounts' for payments pending supervisory approval," says Wilkerson.
"She found the money in a suspense account and arranged for it to be paid at her local branch.
For example, many servicers wrongly believe that the placement of funds into a suspense account does not result in a legal conclusion that the funds have been accepted by the servicer.
Since April 2001, more than pounds 19m has been collected, with more than pounds 2m paid out, leaving pounds 17.03m in the suspense account.
"We have identified a lot of misappropriated and inflated funds which are presently floating in a suspense account.
This action was however intentional and since then the fund has been in a suspense account at the Central Bank of Nigeria - our APEX bank, we are now ready to transfer the fund overseas, and that is where you come in.
If a leveraged ESOP borrows and buys company stock, the stock is placed in a so-called "suspense account." Each year as the corporation makes tax-deductible cash contributions to its ESOP, stock is released from the suspense account and allocated to the accounts of the participants.
One approach is to establish a suspense account for the excess contribution amount, and to use that suspense account to reduce subsequent employer contributions.
He found more than $1 billion in an RTC holding tank called a suspense account. Suspense accounts are where RTC puts money it doesn't know what to do with, like monthly mortgage checks written to the wrong bank or payments mailed without a coupon.