How can an error be located in an account.?

Question

finacial accounting.

Answer 1

To find an error while extracting the trial balance, follow these steps:

1. Re-add the columns, it may be a simple math error. If the balances are now equal, stop. If they are still unequal continue with the steps below until the columns become equal.

2. Determine the amount you are off by.

~ If you are off by 10, 100, 1,000 it is probably a math error. Go back and see if you put in all of the correct numbers.

~ If the amount off is divisible by 9, you likely have a transposition (you entered 76 instead of 67) or slide (you entered 15 instead of 150) error. Go back and double check the amounts from the ledger.

3. Did you omit an account? Or did you put the account balance in the wrong column? Divide the difference by 2 and look for an account with that balance to see if it was entered in the wrong column.

4. Is there a math error in the ledger? Double check ledger work for a possible error.

5. Is there a posting error? Did you post an amount to the wrong account? Go back and check the journal against the ledger to see if they are in agreement.

Answer 2

I used to start with A/P and A/R. I knew that most of the time those were the places I’d find errors, since those were one of my more active accounts, and had the most people doing entries. I’d also look at any manual entries into the system.

Pretty much it is grab a ruler and go by each entry looking for the amount you are off. If no exact dollar amount shows up, then you start to match each entry.

Also, take a look at the amount you are off. Is it a multiple of 9? If so, then most likely it is a typo….