Suspense Account
Definition of 'Suspense Account'In accounting, the section of a company's books where unclassified debits and credits are recorded. The suspense account temporarily holds unclassified transactions while a decision is being made as to their classification. Transactions in the suspense account will still appear in the general ledger, giving the company an accurate indication of how much money it has.In investing, a suspense account is a brokerage account where an investor places cash or short-term securities temporarily while deciding where to invest them for a longer term. |
|
Investopedia explains 'Suspense Account'Suppose a doctor's office has two patients named Bob Smith, each with an outstanding balance of $100. One day at lunch, one of the Bobs stops by the office to pay his bill and leaves $100 cash and his name with the receptionist. Unfortunately, the receptionist does not ask for his address or account number and when the office bookkeeper returns from lunch, she doesn't know which Bob Smith has paid his bill. The bookkeeper would classify the transaction in the suspense account until she could determine which patient to attribute the $100 to. |
Related Definitions
Articles Of Interest
-
Understanding Investor Behavior
Discover how some strange human tendencies can play out in the market, posing the question: are we really rational? -
Current Account Deficits: Government Investment Or Irresponsibility?
Deficit can be a sign of trouble for some countries, and of health for others. Find out what it means when more funds are exiting than entering a nation. -
A Day In The Life Of A Public Accountant
Here's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant. -
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up". -
Financial Statement: Extraordinary Vs. Nonrecurring Items
When it comes to analyzing a company, successful analysts spend considerable time differentiating between accounting items that are likely to recur going forward from those that most likely will ... -
Get A Career In Showbiz Accounting
An accounting career doesn't have to be boring. If you love numbers, but want excitement as well, consider the field of showbiz accounting. -
What Management Accountants Do
If you like keeping track of a company's income and expenses but also want to hold a position with significant responsibility and authority, management accounting could be the job for you. -
GAAP And The IFRS Standards Convergence Efforts In 3 Substantial Areas
Understand the specific steps that have been taken in hopes of converging the GAAP and the IFRS accounting standards, despite the philosophically and culturally based methodological differences ... -
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Small Business: Speed Up Receivables To Avoid A Cash Crunch
Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
Free Annual Reports