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Searching of Errors

If the trial balance does not tally, it indicates that an error has occurred. The error (or errors) needs to be located and corrected before preparing the financial statements. If the trial balance does not tally, the accountant should take the following steps to detect and locate the errors:
  • Verify the totals of debit and credit columns of the trial balance.

  • Compare the account head/title and amount appearing in the trial balance, with that of the ledger to detect any difference in amount or omission of an account.

  • Compare the trial balance of current year with that of the previous year to check additions and deletions of any accounts and also verify if there is a large difference.

  • Re- checks the correctness of balances of individual accounts in the ledger.

  • Re-check the correctness of the posting in accounts from the books of original entry.

  • If the difference between the debit and credit columns is divisible by 2, there is a possibility that an amount equal to one-half of the difference may have been posted to the wrong side of another ledger account.
    For example, if the total of the debit column of the trial balance exceeds by Rs. 1,500, it is quite possible that a credit item of Rs.750 may have been wrongly posted in the ledger as a debit item. To locate such errors, the accountant should scan all the debit entries of an amount of Rs. 750.

  • The difference indicates a complete omission of a posting.
    For example, the difference of Rs. 1,500 given above may be due to omissions of a posting of that amount on the credit side. Thus, the accountant should verify all the credit items with an amount of Rs. 1,500.

  • If the difference is a multiple of 9 or divisible by 9, the mistake could be due to transposition of figures.
    For example, if a debit amount of Rs. 459 is posted as Rs. 954, the debit total in the trial balance will exceed the credit side by Rs. 495 (i.e. 954 - 459 = 495). This difference is divisible by 9.
    A mistake due to wrong posting of the decimal point may also be checked by this method. Thus, a difference in trial balance divisible by 9 helps in checking the errors for a transposed mistake.

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