UK Suspense account

[Polo01]

Hi there,

I was wondering if someone could kindly help and explain answers to the below.

1) When there is no resolution for old payments and receipts that have been cleared from the bank to a suspense account, where are these moved to in the P&L, what type of account and why?

2) Would the account being used to move it to be any different for receipts that were received from customers or payments that were made out by the business to vendors?

I would greatly appreciate your help.

Many thanks in advance.

 

[Fidget]

This sounds like homework, so a text book might say something different, but I just use a single account to get rid. So it doesn't matter if it's a payment or receipt. It just goes to the same account in the P&L.

 

[Polo01]

Thank you. I was referring to this in corporate accounting. This is not homework. To clarify, Which kind of cost account are these amounts typically posted to? Also, can these items still be resolved at a later date? My understanding is they will be written off once moved to the p&l.

Any ideas from anyone will be appreciated.

 

[Fidget]

I clear it off to a write off account. Doesn't matter what it's for, it's just clearing out the suspense account. This only applies to immaterial amounts - it wouldn't happen with large amounts.

And yes, amounts written off can resolve themselves in the future. Just because the net on the P&L goes to retained earnings at the year end doesn't mean an unresolved and written off issue can't surface again after that.