the subsidiary books are not disclosed by the trial balance. Examples of such errors are as follows: (i) Treating revenue expenditure as capital expenditure (ii) Omitting a transaction completely (iii) Entering a transaction in a wrong subsidiary book (iv) Entering a transaction twice in a subsidiary book or journal (v) Entering the amount of a transaction wrongly in the journal (vi) Entering the amount of a transaction wrongly in a subsidiary book (vii) Compensating error . Steps to locate errors Errors can be located by going through various steps. Such steps are as follows: .
. Location of errors before preparation of trial balance Errors may be located before preparing the trial balance either spontaneously or by intentional scrutiny of books of accounts. The following are the steps to be followed to locate errors before preparing trial balance: (i) Scrutiny of entries made in the journal proper (ii) Scrutiny of entries made in the subsidiary books (iii) Checking the totals of the subsidiary books (iv) Scrutiny of postings made to the ledger accounts (v) Scrutiny of balancing of ledger accounts The errors located at this stage are rectified by debiting or crediting the relevant accounts in the books. .
. Location of errors after the preparation of trial balance While preparing trial balance, if it does not tally, it is an indication of presence of errors in the books of accounts. The difference in trial balance is transferred to suspense account and then errors are to be located and rectified. Accountancy The following are the steps to be followed to locate errors after preparing trial balance: (i) The totals of debit and credit columns of trial balance are to be checked.
(ii) The balances of various ledger accounts shown in the trial balance are to be checked to ensure whether they are shown in the respective columns (debit or credit). (iii) The difference in the trial balance must be halved and compared with balances of ledger to verify whether any ledger balance is recorded on the wrong side of the trial balance. (iv) The totals of