1. Dealing with a Trial Balance that Doesn’t Balance
When total debits do not equal total credits, a mathematical or ledger error has occurred. You must find and fix the mistake before moving on to prepare financial statements.
2. Systematic Error-Hunting Protocols
If your columns do not match, use these four steps to locate the error:
  • Calculate the Exact Discrepancy: Find the exact difference between the debit and credit totals.
  • Check for Omissions: Search the ledgers for an open entry that matches the exact amount of the discrepancy.
  • The Divide-by-Two Rule: Look for transactions equal to half of the discrepancy amount. A difference of $4,000 often means a $2,000 debit balance was accidentally written into the credit column, which shifts the total balance by double the amount.
  • The Divide-by-Nine Rule (Transpositions and Slides): Divide the discrepancy by 9. If it divides perfectly, you likely have a transposition error (e.g., writing $78 as $87) or a slide error (e.g., writing $1,000 as $100).

3. Re-Checking the Posting Process
If simple tests fail, re-trace your steps: verify that your column totals are correct, check that balances were copied to the trial balance correctly, and confirm that all journal entries were posted to the ledgers completely.
 
PreviousNext