What is a suspense account?

Today, I am going to try to define a suspense account.  A suspense account is an account in the general ledger used to temporarily carry receipts, disbursements, or discrepancies until it can be analyzed and classified.  The suspense account allows you to record a payment when you don’t know what the payment is meant for.  An example would be if you receive a payment from a client but the invoice is missing from the envelope.  Using a suspense account is preferable to not recording a payment but you need to address it and move the money elsewhere as soon as possible.

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