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Class 11 Trial Balance and Rectification of Errors: cheat sheet
CBSE Accountancy. Preparing a trial balance, the kinds of errors, rectification entries, the suspense account, and how correcting an error changes the profit.
Key ideas
- A trial balance lists ledger balances on a date: assets, expenses, drawings and losses on the debit side; capital, liabilities, revenues and gains on the credit side.
- Agreement proves only arithmetic accuracy: errors of principle, omission, two-sided commission and compensating errors do not show.
- An error of principle mixes capital and revenue items (furniture debited to purchases, repairs debited to machinery, installation wages debited to wages).
- Omission leaves a transaction out; commission puts a wrong amount or the wrong person’s account; compensating errors cancel each other.
- A two-sided error is rectified by one entry between the wrong and the right accounts, with no suspense account.
- A one-sided error (wrong casting, short posting, wrong-side posting, an item not posted) is rectified through the suspense account, which then closes.
- On rectifying, profit rises when an expense was overstated or an income left out, and falls the other way; errors between personal or asset accounts leave it unchanged.
Remember
| Capital (balancing figure) | total debit balances − other credit balances |
| Furniture debited to purchases | Furniture A/c Dr. To Purchases A/c (profit up) |
| Repairs debited to machinery | Repairs A/c Dr. To Machinery A/c (profit down) |
| Sales book undercast | Suspense A/c Dr. To Sales A/c (profit up) |
| Payment to a creditor not posted | Creditor’s A/c Dr. To Suspense A/c (no effect on profit) |
| Posted to the wrong side | correct with twice the amount |
| Original suspense balance | Suspense credited in rectification: it had a debit balance; debited: a credit balance |
| Correct net profit | profit before + increases − decreases |
Watch out
- Rectifying a two-sided error through the suspense account.
- Correcting a wrong-side posting with the amount once instead of twice.
- Thinking a trial balance that agrees is free of errors.
Worked example
A trial balance’s difference was put in a suspense account. After these were rectified it closed: (1) Cash of ₹6,500 received from Nisha was posted to the debit of Nisha’s account. (2) Discount allowed of ₹3,000 to a customer was not posted to the discount allowed account. What was its original balance? (a) the amount (b) debit or credit
Working: Suspense A/c Dr. ₹13,000 To Nisha A/c ₹13,000 (Being cash from Nisha posted to the wrong side, now rectified); Discount Allowed A/c Dr. ₹3,000 To Suspense A/c ₹3,000 (Being discount allowed not posted, now rectified)
Answer: (a) ₹10,000; (b) credit
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