What measures would you take to rectify the errors?

What measures would you take to rectify the errors?

If the trial balance does not agree, in such case to close the books of accounts the difference in the trial balance is posted in a suspense account and then the trial balance is tallied. As the balance in the Suspense account needs to be nil. Thus, attempts are made to locate the errors and the rectification is made through suspense account. It should be remembered that Suspense account exists till the time all the errors are located and rectified making the balance of Suspense account nil.

The other way of rectifying the errors is by passing rectification entries. These entries are passed when the errors which affect two account and do not affect the agreement in the Trial balance. In this method of rectification the following steps are taken:

- First find out the wrong entry passed
- Second, write the correct entry which should have passed.
- Third, to nullify the wrong effect, reverse the same and reinstate the correct by passing rectification entry.

For e.g.: Rs. 200 received from Ravi have been credited to Ram.

Wrong Entry: Cash A/c----------Dr. 200
To, Ram A/c 200

Correct Entry: Cash A/c----------Dr. 200
To, Ravi A/c 200

Rectification Entry: Ram A/c--------Dr. 200 To, Ravi A/c 200
To, Ravi A/c 200
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