Ajay Mady In: Category - Accounting OthersWhere is suspense account shown in the financial statements?financial statementssuspense account ShareFacebook1 AnswerVotedRecent Vaishnavi_Shetty 2020-08-27T09:02:58+05:30Added an answer on August 27, 2020 at 9:02 am This answer was edited. What is Suspense account?Suspense account is a general ledger account prepared in the following situations- 1. Transactions are unidentified or unclassified at the time of occurrence, or 2. Difference arise between the total of debit side & credit side of the trial balance.When the right account is determined or error is rectified, the amount shall be moved from the suspense account to its proper account.Presentation of Suspense account in Financial StatementsIn case Suspense A/c is not closed at the end of the accounting period, the balance in the Suspense A/c is presented in the Balance Sheet.ParticularsFinancial StatementPresentationDebit balance in Suspense A/c (ie. Total of Debit side > Total of Credit side)Balance SheetPresented under the head “Current Assets”Credit balance in Suspense A/c (ie. Total of Credit side > Total of Debit side)Balance SheetPresented under the head “Current Liabilities”Extracts of the balance sheet have been attached for better understanding.Example of Suspense A/cA customer of ABC Ltd makes online payment of 50,000 but he did not specify against which open invoice (out of the 20 open invoices) the amount needs to be settled. In this case, the accountant will pass the initial entry in the suspense account till he identifies the correct open invoice.Journal entry to park the unidentified amount in the suspense account-Bank A/cDebit50,000 To Suspense A/cCredit 50,000The accountant identifies the open invoice against which the amount of 50,000 is to be settled.Journal entry to close the suspense account and post the amount received against the appropriate invoice and proper account-Suspense A/cDebit50,000 To Accounts Receivable (Invoice No. xx) A/cCredit 50,000 0Reply Share ShareShare on FacebookShare on TwitterShare on LinkedInShare on WhatsAppLeave an answerCancel replyYou must login or register to add a new answer.