STEPS TO LOCATE ERRORS :
Whenever there is a difference in the trial balance even by a small amount, the mistakes involved must be located. A small amount may be the net result of a number of mistakes and it is not safe to ignore a difference in trial balance howsoever small it may be. The following steps are suggested to find out errors:
(i) Total the debit and credit columns of the trial balance again. If one amount has been shown for a group of accounts (for example, in place of all customers individually, only one amount against “Sundry Debtors” may be shown), recheck the total of the list of such accounts.
(ii) See that the balances of all accounts including the cash, bank balances have been written in the trial
balance.
(iii) See that there is no mistake in the balancing of the various accounts.
(iv) Find out the exact difference in the trial balance. Look for such accounts which show the same amount. It is possible that the balance of the particular account has been omitted from the trial balance. Accounts showing a balance equal to half the difference should also be checked; the amount may have been written on the wrong side of the trial balance
(v) Recheck the totals of the subsidiary books.
(vi) If the difference is a large one, compare the figures with the trial balance of the corresponding date of the previous year. Any account showing a rather large difference over the figures of the corresponding trial balance of the previous year should be rechecked.
(vii) Posting of all the amounts corresponding to the difference or half the difference should be checked.
(viii) If the difference is still not traced, posting of the accounts will have to be checked. For this, it is better,N first of all, to check the posting of the totals of subsidiary books such as sales book, purchases book, returns books etc. The subsidiary books should then be gone through to see if any items have not been posted. It should also be checked whether the various accounts have been opened with correct balances. Nominal accounts should be checked first, then real accounts and then personal accounts should be taken up.