all the subsidiary books are to be checked, especially if the difference is ` , ` etc. (v) If the difference is divisible by ‘ ’, the difference may be due to transposition of figures in the books. (Writing ` as ` ). Hence, the possibilities of transposition of figures shall be checked.
(vi) The accounts of all the creditors and debtors are to be verified. (vii) Postings from the subsidiary books to different accounts in the ledger are to be checked. (viii) The correctness of the balances of various ledger accounts is to be ensured. (ix) All the amounts carried forward from one page to the next are to be verified.
(x) If the difference still exists, as a final step all the entries in the journals should be ve rified. Student activity Think: Is it possible to prepare final accounts, even when the trial balance does not tally? . Suspense account .
. Meaning of suspense account When the trial balance does not tally, the amount of difference is placed to the debit (when the total of the credit column is higher than the debit column) or credit (when the total of the debit column is higher than the credit column) to a temporary account known as ‘suspense account’. Student activity Think: If the suspense account is not balanced, what does it indicate? .
. Preparation of suspense account Suspense account will remain in the books until the location and rectification of errors. After rectifying the errors and posting the rectification entries to the respective ledger accounts, the suspense account appearing in the ledger is to be balanced. If all the errors are located and rectified, the suspense account gets closed.
. Rectification of errors ERRORS Can be Rectified Depending on the stage at which errors are located, they are subsequently rectified at the respective stage itself. Accountancy . .
Stages of rectification of errors The following are the various stages of rectification of errors: Stage : Before preparing trial balance Stage : While preparing trial balance Stage :After preparing trial