A suspense account is an account which allows you to make the trial balance balance.  When the trial balance is now balanced you can carry on with other tasks.  However, you cannot produce a set of accounts which has a trial balance in it.  So before you prepare the accounts you need to go back to the imbalance, find the error and correct it.  In the exam you will be told the error, but you need to decide if you need a suspense account. You will also need to be able to remove the suspense account, and correct the original entry.

These skills are needed at all levels of accountancy, and come up in all levels of the AAT qualification.  Students do find these types of questions difficult as all errors are different, and you will need to think on your feet.  A good way to attempt these questions is to write down what has happened. You will then need to identify which side of the trial balance is greater.  You can then enter a suspense account on the side which is smaller to make the trial balance balance.  Then you could think about what you need to remove the suspense account and correct the accounting error.

Please click below to view the online lecture where we look at the different types of accounting errors that require a suspense account.

We also have a corresponding blog on errors which don’t require a suspense account here.