Which of the following is correct sequence of steps taken by accountant to detect and locate the errors if the trial balance does not tally?

(A) Compare the account head/title and amount appearing in the trial balance, with that of the ledger to detect any difference in amount or omission of an account.

(B) Re-do and check the correctness of balances of individual accounts in the ledger and Re-check the correctness of the posting in accounts from the books of original entry.

(C) Recast the totals of debit and credit columns of the trial balance

(D) Compare the trial balance of current year with that of the previous year to check additions and deletions of any accounts and also verify whether there is a large difference in amount, which is neither expected nor explained.

Choose the correct answer from the options given below.

(C), (A), (D), (B)

The correct answer is option 1- (C), (A), (D), (B).

If the trial balance does not tally, it is a clear indication that at least one error has occured. The error (or errors) needs to be located and corrected before preparing the financial statements. If the trial balance does not tally, the accountant should take the following steps to detect and locate the errors :

C) Recast the totals of debit and credit columns of the trial balance.

A) Compare the account head/title and amount appearing in the trial balance, with that of the ledger to detect any difference in amount or omission of an account.

D) Compare the trial balance of current year with that of the previous year to check additions and deletions of any accounts and also verify whether there is a large difference in amount, which is neither expected nor explained.

B) Re-do and check the correctness of balances of individual accounts in the ledger and Re-check the correctness of the posting in accounts from the books of original entry.

Some other steps are also as follows after this-

• If the difference between the debit and credit columns is divisible by 2, there is a possibility that an amount equal to one-half of the difference may have been posted to the wrong side of another ledger account. For example, if the total of the debit column of the trial balance exceeds by 1,500, it is quite possible that a credit item of 750 may have been wrongly posted in the ledger as a debit item. To locate such errors, the accountant should scan all the debit entries of an amount of 750.

• The difference may also indicate a complete omission of a posting. For example, the difference of 1,500 given above may be due to omissions of a posting of that amount on the credit side. Thus, the accountant should verify all the credit items with an amount of 1,500.

• If the difference is a multiple of 9 or divisible by 9, the mistake could be due to transposition of figures. For example, if a debit amount of 459 is posted as 954, the debit total in the trial balance will exceed the credit side by  495 (i.e. 954 – 459 = 495). This difference is divisible by 9. A mistake due to wrong placement of the decimal point may also be checked by this method. Thus, a difference in trial balance divisible by 9 helps in checking the errors for a transposed mistake.