Toolkit

 

Finding Errors in the Trial Balance

 

Remember that debits must always equal credits.

 

This image shows two hands to represent that debits go on the left-hand side of a trial balance and credits go on the right-hand side.

 

What To Do When Numbers Don’t Match Between the Debit and the Credit Columns

 

These steps are listed from the most common error to the least common error, so it is best to work through the steps from one to four.

 

Step 1: Add up the Debit column and add up the Credit column again.

 

Step 2: Find the difference between the total of the Debit column and the total of the Credit column. Look for an amount equal to this difference in the general ledger. You may have omitted this account balance from the trial balance.

 

Step 3: Divide the difference between the Debit column and Credit column by two. Look for an amount equal to this result on the trial balance. You may have written a Debit balance in the Credit column, or a Credit balance in the Debit column.

 

transposition error: an error in accounting when numbers are reversed

Step 4: Divide the difference between the Debit column and Credit column by nine. If the difference is evenly divisible by 9, you may have reversed the figures in an amount. For example, you may have written 47 instead of 74, 1.50 instead of 5.10, or 5.98 instead of 5.89. This type of error is called a transposition error.

 

For example, assume that your trial balance is out by 0.45, as in the example below.

 

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

 

Total credits minus total debits is 0.45.

 

The number 45 is a multiple of 9 (9 × 5 = 45). You have probably made a transposition error in the cents column.

 

When you checked the ledger, you found out that the Cash account total was copied wrong. The Cash account total was 2550.50, not 2550.05.

 

Cash Account Total at the End of the Month

 

Microsoft product screen shot(s) reprinted with permission from Microsoft Corporation.

 

slide error: an error in accounting when the decimal point is incorrectly placed to the left or right

Another common error is to write the decimal point in the wrong position. This type of error is known as a slide error. For example, writing 73.00 instead of 730.00. If the difference is exactly divisible by nine, the error is most likely a transposition or a slide error.

 

A trial balance may also be out of balance because of errors in posting. For example, mistakes made in calculating account balances in the general ledger, mistakes made in copying amounts incorrectly from a journal to the general ledger, and forgetting to post one part of an entry from the journal to the ledger are all common errors.