The Trial Balance Flashcards
Make Bread (9 cards)
Why is the trial balance used?
TO make sure that for every amount debited there is an equal amount credited.
What errors must a Trial Balance not include?
An Omission
A Commission
A Reversal of entry
A principle
An Original Entry
What is An Omission?
A transaction that is not recorded at all
What is a Commission?
When you post a debit or credit to the correct side of the ledger, but to a wrong account
What is a Reversal of entry?
When you swap the debits and credits around for a transaction
What is a Principle
When an item is entered into the wrong class of account
What is an Origianl entry
When the original figure is wrong but it is posted correctly
What is a suspense account?
A suspense account is a temporary account which is opened because either:
The bookkeeper does not know where to post one side of a transaction
A trial balance does not balance (due to posting or addition errors)
How can you ‘fix’ a Suspense Account?
When the error has been located, it can be correct by a journal entry and the suspense balance is cleared.
A suspense account posting is always temporary.
