Trial Balance Flashcards
Positive Of Trial Balance?
Reveals types of errors because the debits will not be equal to credits
Limitation of trial balance?
Some errors not revealed, because total debits will be same as total credits still.
Addition Error
Mathematical errors when calculating balances on accounts.
Partial Omission Error
Item has only been entered once (debit/credit)
Transposition error
Amount posted wrong way around (e.g 456 instead of 465)
Unequal posting error
Different amounts debited and credited.
Error of Omission
Transaction completely omitted from records
Complete reversal
Debit and credit entries entered wrong way around
Error of commission
Transaction entered in the wrong account but correct type of account (e.g wrong expense)
Error of principle
Transaction entered into wrong type of account (e.g expense in income statement instead of drawings)
Error of original entry
Correct amounts used, but wrong amount entered in both of them.
Compensating Errors
Two errors cancel each other out
