When a trial balance is out, or it does not agree because of the difference in the total of debit and credit balances, it becomes necessary that the error(s) must be detected notwithstanding the amount involved. A difference of small amount might prove dangerous if it is caused by a number of compensatory errors. The following procedure is generally suggested to locate the difference in the trial balance:

1.    As a matter of fact, the totals of the trial balance itself should be thoroughly rechecked in order to find out exact or correct difference. The use of the calculator is recommended.

2.    Make sure that the balances of cash and bank are included.

3.    The schedules of debtors and creditors should be scrutinized so as to find out that all the debtors and creditors have been included; their totals are correct.

4.    When more than one subsidiary journal are in use, make sure that periodical postings of these journals are included in the ledger accounts with correct totals and in correct sides.

5.    The balances of all ledger accounts should be checked minutely and see that they are correctly drawn out.

6.    It should be made certain that balances of different ledger account are correctly placed in the proper sides of the trial balances e.g., capital account in the credit side whiles the stock account in the debit side. In case an account is written on the wrong side but correct amount, there will be difference of double the amount.

7.    The subsidiary journals should be checked to find out that all the items recorded in them have also been posted to their respective accounts in the ledger.

8.    The difference in the debit and credit columns of the trial balance should be divided by two and then find out whether a figure equal to the same (i.e., half of difference) appears in the trial balance. This procedure would enable to locate the amount placed on the wrong side.

9.    When the mistake is not easily located, divide the difference between the debit and credit columns of the trial balance by 9. If the difference is evenly divisible by 9 the error may be a transposition of figures. To illustrate, if 326 is written as 362, the difference is 36 and it is evenly divisible by 9.

10.    It should be checked that opening balances have been correctly brought forward in the current year’s book.

11.    The nature of the amount of difference sometimes provides an important clue for locating the errors.
(a)    If the difference is a round figure, the errors might be in castings or in balancing or carrying forward.
(b)    If the difference is considerable or abnormal. It is appropriating to compare the balances of the current year with that of the previous year to find whether a particular balance of the account has not been included in the trial balance.
(c)    If the difference is not in round figure, the mistake might be in posting.


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