What is the purpose of a suspense account?
- A To hold profits before distribution
- B To temporarily record a difference or unidentified item until it is investigated and corrected
- C To record depreciation
- D To hold cash reserves
Answer
To temporarily record a difference or unidentified item until it is investigated and corrected
A suspense account balances the books temporarily when an error or unidentified entry exists. It must be cleared before final accounts are prepared.





