Accountants prepare trial balance to check the correctness of accounts. If total of debit balances does not agree with the total of credit balances, it is a clear-cut indication that certain errors have been committed while recording the transactions in the books of original entry or subsidiary books. It is our utmost duty to locate these errors and rectify them, only then we should proceed for preparing final accounts. We also know that all types of errors are not revealed by trial balance as some of the errors do not effect the total of trial balance. So these cannot be located with the help of trial balance. An accountant should invest his energy to locate both types of errors and rectify them before preparing trading, profit and loss account and balance sheet. Because if these are prepared before rectification these will not give us the correct result and profit and loss disclosed by them, shall not be the actual profit or loss.
Rectification Of Accounting Errors
March 7th, 2008 · No Comments
Tags: Business
Accounting - The Diy Way
January 10th, 2008 · No Comments
Adpoting proper accounting record keeping is a must for any business. Using good accounting practice make the overall management of the business very easy and also help in complying with regulatory authorities. Accounting is based on certain basic rules and principles. Adopting these rigid rules and principles make accounting practice consistent for all business transactions. There are seven major books of accounts. They are as follows :
Tags: Business