Errors Revealed by the Trial Balance and Their Correction

A Suspense Account is opened to take care of errors which have caused an imbalance in the Trial Balance but which have not yet been detected in the books of the business.  When they are discovered, they have to be corrected by a double entry, one entry in the Suspense Account and the other in the account concerned.

The Suspense Account will have a credit balance when the credit total in the Trial Balance is short and a debit balance when the debit total is short.  The Suspense Account is included in the Balance Sheet to enable it to balance.  A credit balance in the Suspense Account will be written on the liability side while a debit balance will appear on the assets side.

The Suspense Account does not appear in the revised Balance Sheet because the difference in the books has been accounted for and the Suspense Account is closed.