Theory question 101
Trial BalanceSection A (answer two questions only from this section)
1. (a) State three reasons why a trial balance may not balance (b) State three errors that would not affect the agreement of the trial balance (c) What is a suspense account?
Show the model answer
(a) Any three: single entry (only one side posted); a balance left out or put on the wrong side; wrong balancing of an account; overcasting or undercasting; different amounts on the debit and credit sides; transposition on one side only.
(b) Any three: errors of omission, commission, principle, original entry, compensating errors, complete reversal of entries.
(c) A suspense account is a temporary account that holds the difference in the trial balance until the errors are found and corrected.
Errors that keep debits equal to credits do not show up in the trial balance.