Which errors actually affect the trial balance?
These errors usually involve only one account in any transaction. That account has either:
- an over-debit or an over-credit
- an under-debit or an under-credit
To rectify an error that has affected the Trial Balance needs only one entry in the relevant account. This will bring the trial balance back to the agreement. However, when a trial balance is found to be out of the agreement at the end of a period, it is usual to open a ‘Suspense Account’ and to place the ‘difference in trial balance’ to this account.
The entry made in the suspense account is equal to the amount of difference in the two columns of the trial balance and is made on the side which has a smaller total in the trial balance. Hence if the Dr. side of trial balance has a total of $64,380 and the Cr. side’s total is $64,210 the Suspense Account would appear as follows:
Opening of a suspense account brings the trial balance into the agreement. If an error is discovered after a suspense account has already been opened, the rectification entry must be a ‘Double Entry’ and passed through the suspense account.