22. How to simplest method of check ing is to review the entries, comparing the postings with the original records. To show how far the work has progressed, and to allow for interruptions, it is customary to place a check mark ( V ) opposite each item that is correct. These marks should be small in order that the check mark of one item may not ex tend to the next item and thus give the false impres sion that both have been checked.
After the checking is completed, any unchecked item is a danger signal and must be investigated. If an item has been posted to the wrong account, the fact will be discovered at the time of checking; the correct posting must then be made and checked off. After that, the incorrect posting or postings will stand out as unchecked items.
It is seldom advisable to have two persons work to gether to do the checking. The clerk who calls off the entries will not be so busy as the other; conse quently his mind may wander and he may frequently overlook an error. Then, too, it is more economical to have two clerks work independently, since they can accomplish more than two clerks working together.
23. Reconstructions of posting media. — This method is sometimes varied by reconstructing the books of original entry from the data contained in the ledger. In other words, the postings for the month in the ledgers are segregated and classified according to their sources. This is sometimes known as the process of reverse posting. A sheet somewhat sim ilar in form to the following is constructed from the debits and credits in the ledger.
Let it be supposed that the debits are normally re ceived from the cash book, the sales books, the pur chase book and the journal. A debit column and a credit column will be provided, then, for each of these books. Beginning with the first account in the ledger, all transactions for the month will be transferred in dividually to their respective columns on the reverse posting sheet. Only the amounts need be entered on the sheets. When, at the end of the first day, the postings have been transferred to this sheet, the to tals for each column should equal the total of the books from which they have been taken, and the total of the debits should equal the total of the credits. If this equilibrium does not exist, the error must lie in one or more of these columns.
By a comparison of the total of each column with those of the books in which the item originated, the particular book in which the error occurred can soon be found. It is then necessary to go thru that book and locate the error. The first step is to look
for one item, the amount of which is the same as that of the item that is being checked. If the error can not be found in this way it is probable that the item is composed of two separate amounts, and the book must be rechecked until the error is located.
Such a check may be Made at the end of each day, in order to verify the transactions of that day; or it may be carried on continuously during the month, in which case the totals would be brought forward every day. The latter method would serve to prove the. additions in the books of original entry. If the re verse-posting sheet is not continually used, it will fre quently be found an aid in locating an error that has been disclosed by the trial balance. For such a pur pose it would be prepared at the end of the month for the entire month's transactions.
24. Routine; reverse-posting methods.—The ques tion may arise, When should the reverse-posting sheet be filled out—at the time of posting, or separately at some other time? It is, naturally, easier to make the postings to the ledger account first, and then, while the ledger is open, to transfer this amount again to the reverse-posting sheet. ' As a matter of fact, the value of the reverse-post ing process is due to the fact that the contents of the reverse-posting sheet are a transcript of the ledger. It is possible, if the transfer is made at the time the account in the ledger is posted, that the clerk, even if he had the correct figures fresh in his mind, might make the entry on his reverse-posting sheet directly from the book of original entry, and yet make an in correct posting in his ledger. It is far better to recon struct the ledger-posting sheet separately, and after the ledgers are posted.
There are two methods, either of which may be used. One is to examine every transaction in every account recorded in the ledger, and to select those that are entered under the dates being checked. The second is to leave at the time of posting some indi cation by means of which the accounts affected may be located readily at any later time. This latter method makes it possible to compile the reverse-post ing sheet by referring only to those accounts that have been indicated, as suggested above. This method is perhaps especially to be preferred when there are many ledger accounts. It must be admitted that the first plan insures greater accuracy, since it will in sure the elimination of such errors as posting the same item to two different accounts.