Clearing Account
Definition
A clearing account is a temporary holding account used to park money until it is moved to its final destination. The balance should return toward zero once the activity is resolved.
Example
Customer payments are recorded to a clearing account until they are grouped and deposited to the bank. Once deposited, the clearing account returns to zero.
Why It Matters
Clearing accounts help match grouped deposits to individual payments. An old balance in a clearing account often signals a bookkeeping problem.