Finding Errors

Knowing that there is a discrepancy on the balance sheet or income statement does not give you enough information to resolve it.  Discrepancies are caused by errors.  To accurately resolve a discrepancy, you need to identify the errors that caused it in the detailed transactions.  Once the errors are found, the accounting may be corrected by fixing the error and reclosing the month or making general journal entries in the last month that has not been closed.  Even though it is easy to calculate the adjustment entries to make the accounting right, doing so without knowing the cause is dangerous.