Trial Balance and Rectification of Errors

A better way therefore is by noting the correction on the appropriate side for neutralising the effect of the error. Take for example a case where Shyam’s account was credited short by Rs. . This will be rectified by an additional entry for Rs.

on the credit side of his account as follows. Shyam’s Account Difference in amount posted short on..... Take another example, purchases book was undercast by Rs. , .

The effect of this entry is on purchases account (debit side) where the total of purchases book is posted Purchases Account Undercasting purchases book for the month of.... Suspese Account Even if the trial balance does not tally due to the existence of one sided errors, accountant has to carry forward his accounting process prepare financial statements. The accountant tallies his trial balance by putting the difference on shorter side as ‘suspense account’. The process of opening of suspense account can be understood with the help of the following example : Consider the sales book of an organisation.

Sales Book (Journal) Invoice Name of customers L.F. No. (Accounts to be debited) Ashok traders Bimal service centre Chopra enterprises Diwakar and sons , ,