After the errors are corrected, what happens to the suspense account balance?

After the errors are corrected, what happens to the suspense account balance?

• A. It is transferred to the asset accounts
• B. It is eliminated when the trial balance balances
• C. It becomes revenue
• D. It is carried forward to the next period

Answer: (B)

A suspense account is a temporary holding place for the difference that arises when errors are found but not yet fixed. It keeps the books in balance while corrections are being posted to the correct accounts. When those corrections are completed, every entry is moved to the proper account and the balancing figure in the suspense account disappears—the trial balance then balances and the suspense account is closed. So the balance is eliminated, not transferred to assets, not turned into revenue, and not carried forward.

A suspense account is a temporary holding place for the difference that arises when errors are found but not yet fixed. It keeps the books in balance while corrections are being posted to the correct accounts. When those corrections are completed, every entry is moved to the proper account and the balancing figure in the suspense account disappears—the trial balance then balances and the suspense account is closed. So the balance is eliminated, not transferred to assets, not turned into revenue, and not carried forward.