QS Study

Stages of Rectification

The stage in which rectification is done depends on identification or locating the error. Rectification of errors may be explained in two stages.

Rectification before the preparation of trial balance: In this stage, errors are located before transferring the difference in the trial balance to Suspense Account.

Rectification after the preparation of trial balance: In this stage, the difference in the trial balance would have been transferred to Suspense Account. So wherever applicable suspense account is used while is passing rectification entries.

Stage at which the errors are rectified:

  • When the errors are rectified before transferring the difference in the trial balance to the suspense account.
  • When the errors are rectified after transferring the difference in the trial balance to the suspense account.

Manner in which the errors are rectified:

  • By debiting or crediting the respective account with the required amount by giving an explanatory note in the particulars column.
  • By writing a journal entry with the respective account or accounts affected by the errors and suspense account.