Anytime there is uncertainty about where a financial transaction is to be recorded, it gets recorded in what’s called a “suspense account”, pending when the appropriate destination of the recording is determined.
By year-end, huge unexplained balances could remain in the suspense accounts demanding for explanations. There are many unethical uses that suspense accounts could be put to in order to distort the true position of the accounts.
This online version of the Suspense Account Reconciliation Course has therefore been designed to update Account Reconciliation Officers and other Officers whose duties are connected in one way or the other on the methods of resolving Suspense Account issues. Candidates who successfuly complete this course and pass the prescribed Tests at the end of each Lesson will be issued with the TSI Limited Certificate of Course Attendance
Lesson 1: Introduction to Suspense and Accounting Errors
Introduction
Purpose of Suspense Accounts
Types of Errors in Accounting
1. Subsidiary Entries
2. Error of Omission
3. Transposition Errors
4. Rounding Errors
5. Errors of Principle
6. Errors of Reversal
7. Errors of Commission
What Are the Most Common Errors in Accounting?
- Errors of omission
- Data entry errors
- Data classified incorrectly
Lesson 2: Resolving Suspense Account
Correcting Errors in Accounting
- Error correction example
Technology Tip (using Quick Book)
- Organization of Suspense Accounts
- Assets
- Liabilities
- Equity
- Revenue
- Cost of Sales
- Expenses
Examples Using Suspense Accounts
- Government Payment
- Unknown Expense
- Additional Capital
- Arbitrary Payment to a Vendor
- Commitment Made for an Asset
- Clearing Suspense Entries
Technology Tip (using Quick Book)
- Get Descriptive
- Set a Flat Value Marker
- Complex Transactions
- Be Proactive
- One final note about suspense accounts
- Summary – Suspense Accounts
Why Is Reconciliation Important in Accounting
What Is Reconciliation?
How Reconciliation Works
- Documentation Review
- Analytics Review
Why account reconciliation is important for business and individuals
3 Reasons General Ledger Reconciliation Is Important
What is General Ledger Reconciliation?
- General Ledger Reconciliation Using GAAP Principles
Lesson 3: Suspense Account and the Integrity of Financial Statement
Financial Integrity
- Balance sheet account reconciliation
- Companies need to reconcile all accounts
- Some companies will not be able to accomplish
- Because account reconciliations are so important
- Achieving Balance Sheet Integrity
Weak Controls
- Checklists of journals to be recorded
The road to reconciliation
- Practical Tips
- Risk-rate all accounts.
- A new tool
Bank Reconciliation
- What is Bank Reconciliation?
What are the reasons for the mismatch of the Balance of Bank account in Books of Company with Balance in the books of Bank?
- Un-presented Cheques
- Deposit in Transit
- Errors in Bank