The second plan is the one more frequently used. Sometimes strips of paper are inserted in the proper places at any accounts to which postings have been made. When the reverse-posting is made, it is neces sary only to refer to the accounts indicated by the slips of paper. Or sometimes different colored strips of paper are used to mark these places—for example, red strips for debits, and white strips for credits. Either method is dangerous, because the position or the color of the strip is liable to have a suggestive ef fect on the bookkeeper, and to lead him to correct his error when he makes the transfer, instead of leav ing it to the checker to verify the entire transaction. If a card ledger is used, it is possible to segregate the cards to which the postings have been made and keep them separate until the reverse check has been corrected.
25. Variation of these another re verse-posting method, one that insures even greater accuracy, is the following: The name of the account is entered on the sheet at the time of posting, and the checker is required to fill in the amount opposite the name; he must also indicate in the. proper column the book from which the posting was originally made. It is even advisable for the poster to enter only a part of the name, together with the page number of the book of preparatory entry. The checker will complete the name and indicate the amount as pre viously explained. This insures posting to the cor rect account as well as posting the correct amount.
26. Current method has been devised whereby the trial balance itself is made almost self proving. Some form of checking is essential to ac curate bookkeeping, and the following method makes it combine the checking with the current work of en tering the books and proving them.
The ledgers are posted according to the ordinary method, no subsequent check being made of the in dividual postings in the ledger. On separate proof sheets, summaries are prepared for all accounts in the ledger. If only the page number of the book of original entry and the amount are entered here, very little space will be taken up for each account. This posting to separate sheets, where as many as one hun dred accounts are grouped under the eye at one time, can be done very quickly. In fact, it has been found that the separate accounts can be posted in a shorter time than would be required for a complete checking of the individual postings to the ledger accounts in the ledger. On another sheet the trial balance is pre
pared, in a form somewhat like the following: The two columns on the left contain the balance in the account at the beginning of the month. The two columns in the center are provided for the total debits and the total credits of the month. These items are obtained from the ledger accounts that were con structed on the proof-sheets. Thus, it will be noted, the proof-sheet itself contains only a summary for the month' of every debit and every credit to each ac count.
When these monthly totals have been transferred to the trial balance, the balance at the end of the month is obtained by adding or subtracting the net change for the month to the balance at the beginning of the month. If this addition is correct, the page totals should present an equal state of balance. The net debit or the net credit at the beginning of the month, plus or minus the net debit or the net credit during the month, equals the net credit or the net debit at the end of the month.
After all the monthly figures have been transferred to the trial balance, and the new balances at the end of the month have been computed, first the monthly figures may be added, and then the total balance fig ures. Of course, if the monthly figures agree—that is, if the debits equal the credits—there is the basis for a correct trial balance. In order to present a com plete trial balance, it is necessary only to make the extensions to the new balance columns. It is possi ble, however, that errors have been made which do not appear in the trial balance, such as postings to the wrong accounts and similar mistakes.
In order to verify the ledger accounts and eliminate any such errors, the balance of each account in the ledger is next computed; it is then indicated in the balance column of the ledger account. The balances, as shown by the trial balance, are then checked against the balance in each ledger account. There is very little chance that an error will be made in the trial balance by one clerk, and repeated by another in posting to the ledger. If the new balances agree, it is reasonably certain that all postings are correct, not only as to amounts, but also as to accounts. Of course if the postings do not agree, they must be veri fied and the proper correction must be made either in the trial balance or in the ledger accounts.