Refer to Darlington, Inc.’s trial balance in Short Exercise 2-10. The purpose of this exercise is to help you learn how to correct three common accounting errors.
Error 1. Slide. Suppose the trial balance lists Land as $4,500 instead of $45,000.
Recompute column totals, take the difference, and divide by 9. The result is an integer (no decimals), which suggests that the error is either a transposition or a slide.
Error 2. Transposition. Assume the trial balance lists Accounts Receivable as $81,000 instead of $18,000. Recompute column totals, take the difference, and divide by 9. The result is an integer (no decimals), which suggests that the error is either a transposition or a slide.
Error 3. Mislabeling an item. Assume that Darlington, Inc., accidentally listed Accounts Receivable as a credit balance instead of a debit. Recompute the trial balance totals for debits and credits. Then take the difference between total debits and total credits, and divide the difference by 2. You get back to the original amount of Accounts Receivable.