There may be shortcuts to find accounting errors, but you must be proficient in the use of skills before you can catch the errors. Although there are countless reasons for the formation of wrong accounts, the following points can still be listed by summarizing the methods and experience of accountants for many years in finding wrong accounts:
1) Focus on finding double or missing entries!
To trace the source of the error most fundamentally, the two situations that are most likely to occur during bookkeeping are “re-entry” or “missing entry”. When an accountant or bookkeeper registers the account books, the most common mistake is to only write down one side, or only write down one side, or even rewrite the account due to carelessness.
Therefore, the way to prescribe the right medicine is to start by checking the general ledger. Be sure to sum up the amounts recorded in all the accounts, and then check with the general ledger. After confirming that it is a “standard account”, you can check it with the journal .
Once there is a problem of omission or re-entry in the journal account, you should find that the amount of increase or decrease does not match the amount of the general ledger. Specifically, if the amount incurred in the journal account is larger than that in the general ledger, it means that there is a “re-entry” in the daily bookkeeping.
Therefore, through the comparison of the general ledger and the journal account, you can immediately know whether it is a re-entry or omission of the account. The difference can be used as a clue to further find the wrong account. Just find the item that is the same as the amount/value. It can speed up the chance of finding wrong accounts.
2) Is this issue correct? Check the wrong account from the previous period by tracing the root method
If you have spent a lot of time and can’t find the wrong account; or if the current period’s balance is proved to be correct, but there is still an error in the general ledger for some reason, you may need to check from the previous period’s carry-forward, on behalf of The source of the error is not necessarily in the current account.
On the premise that the accounting statements remain absolutely balanced, the root-tracking method aims to check whether there are undiscovered errors carried forward from the previous period (and may continue to be pushed up), which happen to be discovered only in the current period. The fact that there is no error in this period also implies that there may be accounting errors in the opening figures, that is, the carryover figures from the previous period.
3) Mother and Child Law
Another backup solution can be used when the subsidiary ledger and general ledger balances are not attached, and the above method does not come in handy. In short, the “Mother-child Method” uses the amount of debits and credits recorded in the general ledger as the denominator, and the debit and credit figures of each subsidiary ledger are the sub-numbers, and the sum of the sub-numbers must be the parent number.
This proves that there may be omissions, mis records or re-records in the solid record. In other words, if the company’s accounts receivable in the current period is a debit of 2,478 yuan; and if the sum of the balances of the subsidiary accounts is 3,067 yuan, that is, the debit balance of the subsidiary accounts receivable is 589 yuan more.
At this time, you can record the amount of the general ledger receivable account in order according to the account consolidation table as the parent number, and then each subsidiary account
Consolidate and consolidate accounts receivable from the beginning to the end and add the sub-numbers to the sub-ledgers. If it matches the parent number, check No. 2 and No. 3… if it matches. Check which number is found to be inconsistent, so that the wrong account or missing account can be checked.
The above information is for reference only. If you have any questions about tax declaration and accounting, we welcome your inquiries.