HINTS FOR LOCATING ACCOUNTING ERRORS
1. If you have been given the correct total for amounts in financial statements or trial balance and your amounts are not the same.
Subtract the amount that you have wrong in your statement or trial balance from the amount the answer should be. This difference can be very useful in determining the possible error you need to locate and correct.
A. If you find two errors or differences of the same amount but in different directions in your trial balance, you probably journalized and/or posted to the wrong accounts. For instance, if you find you are over $2,500 in Accounts Receivable and under $2,500 in Cash, look for a specific transaction involving a $2,500 cash receipt that you recorded as an Accounts Receivable when it should have been Cash.
B. If the difference is evenly divisible by 9 you have a transposition. Your Accounts Payable total is $2,450 and the book shows it should be $2,477.
1) A transposition means you reversed two digits in a number or left a zero off the end of a number. You wrote or typed $540 when the amount is $450. Or you wrote 12 instead of 120.
2) Evenly divisible means you will not get a remainder when you divide by 9. The difference between the two Accounts Payable amounts is $27. When 27 is divided by 9 you get 3 with no remainder, so you have a transposition. If the difference between the two numbers had been 22, when you divide by 9 you get 2 with 4 remaining so you do not have a transposition.
Want to know a cool trick that old timers learned when we did not have calculators? If you add the digits of the difference between the two numbers until you get a single digit answer of 9 then you have a transposition. Say what? The difference was 27. If you add 2 plus 7 you get 9, and I already proved that was a transposition. What if the difference was 14,517? If you add 1 plus 4 plus 5 plus 1 plus 7 you get 18. Eighteen is not a single digit so keep adding! If you add 1 plus 8, you get 9 so you know you have a transposition. Now wasn’t that fun!
C. If the difference is 3 or 30 or 300, in other words you are off by 3 in one column only, you may have made a tenkey calculator error. Calculator finger pads have three rows of numbers with three numbers per row. You were trying to key a 4, and you either hit above the 4 and keyed a 7, or below the 4 and keyed a 1. Notice the difference is always a 3.
2. If your debits do not equal your credits in your trial balance. (Obviously you are doing accounting the old fashioned way with a pencil instead of a computer program!)
Try readding your columns. If you are still out of balance subtract your credit total from your debit total to determine how much you are out of balance. This difference may help you find your error.

Start by looking through the ledger for that exact amount. You probably just missed putting it in the trial balance.

Next, divide the difference by 2. Check your balances for that number and determine if you posted the number in the wrong column as a debit when it should be a credit, or vice versa. Even if you have posted that amount in the correct column, you may have added it when it should have been subtracted, so check that particular account balance. For example, you are out of balance by $1,600. When you divide by 2, you will look for an error of $800. You will be thrilled to find you put an $800 Notes Payable in your ledger as a debit when it should have been a credit. Or maybe you posted it correctly as a credit, but when you totaled Notes Payable, you subtracted the $800 instead of adding it.
C. Finally you may not have entered the transaction completely in your journal accounts, or you entered one side of the transaction twice. If your debits are more than your credits by $520, start looking for a transaction of that amount in your journal. You discover a purchase your company made on account for that exact amount, but you only debited purchases for $520 and made no credit to accounts payable. Or maybe you got the journal entry correct, debiting purchases for $520 and crediting accounts payable, but for some reason you added an additional debit of $520 to inventory. 