Bookkeeping For Dummies
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If your trial balance isn’t correct, you need to work backward in your closing process to find the source of the mathematical error. When you need to find errors after completing a trial balance that fails, follow these four basic steps to identify and fix the problem. And remember, this is why all bookkeepers and accountants work with pencils, not pens — pencils make erasing mistakes and making corrections much easier.

  1. Check your math.

    Keep your fingers crossed, and add up your columns again to be sure the error isn’t just one of addition. That’s the simplest kind of error to find. Correct the addition mistake and re-total your columns.

  2. Compare your balances.

    Double-check the balances on the trial balance worksheet by comparing them to the totals from your journals and your General Ledger. Be sure you didn’t make an error when transferring the account balances to the trial balance. Correcting this type of problem isn’t very difficult or time-consuming. Simply correct the incorrect balances, and add up the trial balance columns again.

  3. Check your journal summaries.

    Double-check the math in all your journal summaries, making sure that all totals are correct and that any totals you posted to the General Ledger are correct. Running this kind of a check, of course, is somewhat time-consuming, but it’s still better than rechecking all your transactions.

    If you do find errors in your journal summaries, correct them, reenter the totals correctly, change the numbers on the trial balance worksheet to match your corrected totals, and retest your trial balance.

  4. Check your journal and General Ledger entries.

    Unfortunately, if Steps 1, 2, and 3 fail to fix your problem, all that’s left is to go back and check your actual transaction entries. The process can be time-consuming, but the information in your books isn’t useful until your debits equal your credits.

    If this step is your last resort, scan through your entries looking specifically for ones that appear questionable. For example, if you see an entry for office supplies that’s much larger or much smaller than you normally expect, check the original source material for that entry to be sure it’s correct.

    If you carefully proved out the Accounts Payable and Accounts Receivable journals, you can concentrate your efforts on accounts with separate journals. After you find and correct the error or errors, run another trial balance. If things still don’t match up, repeat the steps listed here until your debits and credits equal out.

You can always go back and correct the books and do another trial balance before you prepare the financial reports. Don’t close the books for the accounting period until the financial reports are completed and accepted.

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Lita Epstein, MBA, designs and teaches online courses in investing, finance, and taxes. She is the author of Trading For Dummies and Bookkeeping Workbook For Dummies.

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