Opening entries - suspense account

Dear Folks,

I searched the fourms to update the opening entries

Here i need to know one thing what is the best way to update the opening entries.

Is it the best way to create the suspense account or Not.

Because i have seen in these forums many experts are not recommended to create the suspense account.

so my doubt is how can i update the debit or credit in chart of account with out suspense account.

EX :

i need to update the opening stock through item journal

when i update the stock then automatically two accounts will effect.

  1. Inventoy - Debit

  2. Inevntory adjustment - credit

here my doubt is do i need to take the actal invenoty adjustment account or Suspense account to update the credit .

same as when it comes to customer opening

Customer = credit

then which account i need to take to update the Debit .

is it sales account or suspense account.

so share your experience regarding this opening entries.

Easiest way - use positive/negative stock adjustments with posting date before startup date.

“suspense account” is used while entering startup entries, but, when you finish, its balance MUST be zero, so, afterwards additional postings can be made, but the rule remains - balance finally must again be zero.

For Customer use some Recievables account - depends on your CoA and accounting practice - ask your accountants, they will answer you easily. (but remember to post a transaction with AccType=Customer, not G/L account - otherwise Cust.Card won’t reflect changes, only corresponding G/L account will do)

First I would suggest you look at the process, customers for opening entries will not be sales or suspense, it would be customer and debtors. You need to process some basic journals through first.

As for “suspense” do not call it that, it leads to confusion based upon the use of this account in legacy systems. You can refer to it as a take on account, but as Modris states this will ultimately balance to zero and is used, in my opinion, purely as a reconciliation account at the preference of the current accountant. If you are entering a TB and creating the total entries through balances you simply remove these from the TB entry to avoid duplication. Ultimately it will balance, otherwise you have done it wrong. [:D]

hi mr. modris ivans,

i would like to ask if i’m doing the right one, i’m posting all my beginning balances at GL Journal since i can’t post it w/o bal. acct. no. i select retained earnings as my temporary accounts since i don’t have a suspense acct. and our accountant is not using this acct. title, after i posted all acct. titles of my BEGBALs on BALANCE SHEET, my retained earnings bloated to 41M, my question is, is it right to use RETAINED EARNINGS? and if it yes, how to ZERO OUT this one?

Highly appreciated your positive response on this.

ronitte

No it is not correct to use retained earnings. You either need a suspense to balance out the entries created by the detailed migration, or you must put everything into the correct accounts, ensure the TB balances and on the detail imports ensure it balances to zero on the impacted account. Talk to your accountant they are the ones that decide this as they need to reconcile it, outside of this it is just data movement.

mr. adamroue,

thanks for the instructions, i’ ll try to use suspense account for my begbals but then how to zero out suspense account, is it necessary to zero out suspense account? if yes, kindly instruct me on what to do.

thanks and god bless.

ronitte.

  1. If you put the TB in as a journal it will balance and no suspense account will be hit.

  2. Balances that the detail will be made from other transactions like the debtors balance would double the debtors opening balance

  3. Therefore you post the debtors trial balance amount to suspense

  4. You then import the detail of the debtors, the debtors goes to the debtors account, the other side of the detail transaction goes to suspense.

  5. If the detail entries match the TB debtors, which of course it should, then the suspense account will be zero.

  6. If the suspense account is not zero you have done it wrong.

  7. Apply this to all opening balance accounts where the detail is required - matching this to the opening TB,

  8. You can for ease of reconciliation have multiple suspense accounts - debtors, creditors, stock, debtor groups etc etc.

  9. If the suspense account is not zero you have a reconciliation issue and your data/import is wrong.