Write short note on suspense account with examples?

A suspense account is a temporary account used to record transactions that cannot be immediately classified into a specific category. These transactions are typically unclear or incomplete, and need further investigation or clarification before they can be properly recorded in the appropriate accounts.

Examples of transactions that may be recorded in a suspense account include:

1. Unclear or incomplete journal entries: If a journal entry is missing important information or is unclear, it may be recorded in a suspense account until the necessary details are obtained.

2. Discrepancies in bank statements: If there are discrepancies between the company's records and the bank statement, the difference may be recorded in a suspense account until the discrepancy is resolved.

3. Unidentified payments or receipts: If a payment or receipt cannot be matched to a specific customer or vendor, it may be recorded in a suspense account until the recipient or payer is identified.

Once the necessary information is obtained, the transactions recorded in the suspense account can be properly classified and transferred to the appropriate accounts in the company's financial records.