Trial balance difference amount show in books

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Kollipara Sundaraiah (Querist)

09 September 2021 Sir,
Assess trial balance difference amount rs:4256.10 credit in books
Question:
Trial balance difference amount transferred to capital account or profit and loss account correct procedure.

CA Kushwanth AVSR

CA Kushwanth AVSR (Expert)

09 September 2021 Actually, there cannot be difference in trail balance. However, if the difference is in credit side i.e., debit side is more than credit side then it is better to show it to profit and loss account so that it can be deemed to be admitted as income for income tax. If it is debit side then it is better to transfer it to capital account.
However as per Accounting, it is better to identify the mistake and if the mistake is related to profit and loss account entries i.e., nominal accounts then transfer it to profit and loss and if it is related to real and personal accounts then transfer it to Capital Account

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