CBSE Class 11-commerce Answered
Explain
the steps to be taken to detect and locate errors.
Asked by Topperlearning User | 29 Jul, 2016, 09:59: AM
Expert Answer
Steps to identify the errors:
- Recast the totals of debit and credit columns of the trial balance.
- Compare each account head and its amount appearing in the trial balance with that of the ledger to detect any difference in amount or omission of any account.
- Compare the trial balance of the current year with that of the previous year to check the additions or deletions of any accounts and to verify if there isany unexplained difference in amounts.
- Re-check the correctness of balances of individual accounts intheir respective ledgers.
- Re-check the accuracy of the postings in individual accounts from the transactions entered in the books oforiginal entry.
- If the difference between the debit and credit columns is Rs.1, Rs.10, Rs.100 or Rs.1000, the casting of the subsidiary books should be re-checked.
- If the difference between the debit and credit columns is divisible by 2, then there is a possibility that an amount equal to half of the differencemay have been posted to the wrong side of another ledger account.
- The above point may also indicate a complete omission of a posting.
- If the difference is divisible by 9, the mistake could bedue to transposition of figures.
- Still, if it is not possible to locate the errors, the difference in the trial balance for that momentis transferred to the ‘Suspense Account’. All the one-sided errors detected are rectified through this account.
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