**Suspense Account**

A suspense account is a temporary account used to hold the difference between the debit and credit sides of a trial balance. It is created when there are errors or omissions in the accounting records that prevent the trial balance from balancing. The purpose of the suspense account is to allow the financial statements to be prepared and the accounting errors to be identified and corrected.

**Preparing the Suspense Account**

To prepare the suspense account, we need to determine the difference between the debit and credit sides of the trial balance. In this case, the debit side total is 10,000 and the credit side total is 8,700, resulting in a difference of 1,300. This difference is usually placed on the side with the smaller total, in this case, the credit side.

The suspense account is prepared in the general ledger and is typically named "Suspense Account" or "Suspense". It is represented as a temporary account and should be closed out once the errors are identified and corrected.

**Suspense Account Entry**

The entry to record the difference in the suspense account is as follows:

Suspense Account 1,300
To Various Accounts 1,300

**Explanation of the Entry**

The suspense account is debited with 1,300 to balance the trial balance. This means that the suspense account is debited for the difference amount. The credit side of the entry represents the various accounts that have been affected by the errors or omissions.

**Identification and Correction of Errors**

Once the suspense account has been created, the next step is to identify and correct the errors or omissions that caused the trial balance to be unbalanced. This may involve reviewing the ledger accounts, bank statements, invoices, and other relevant documents to find the discrepancies.

Once the errors have been identified, the necessary adjustments can be made to the affected accounts. These adjustments may include posting missing entries, correcting incorrect entries, or adjusting account balances.

Once the errors have been corrected, the suspense account can be closed out by transferring the balance to the appropriate accounts. The suspense account should have a zero balance after all the necessary adjustments have been made.

**Conclusion**

In conclusion, a suspense account is used to temporarily hold the difference between the debit and credit sides of a trial balance. It allows the financial statements to be prepared while the errors or omissions are being identified and corrected. The suspense account is debited or credited with the difference amount, and once the errors have been rectified, the balance is transferred to the appropriate accounts and the suspense account is closed out.