Theory question 103
Trial Balance3. (a) What is a Trial Balance? (b) State four reasons why a trial balance may not balance
Show the model answer
Model answer
(a) A trial balance is a list of all the debit and credit balances extracted from the ledger on a particular date to check the arithmetical accuracy of the books.
(b) Any four: a balance left out of the trial balance; a balance put on the wrong side; incomplete double entry (single entry); wrong balancing of an account; errors in addition (undercasting or overcasting); posting different amounts to the debit and credit; transposition of figures on one side only.
Explanation
Only errors that make debits differ from credits stop the trial balance from agreeing.