Name some errors which are not disclosed by trial balance
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Answer Posted / kruthika
A trial balance only checks the sum of debits against the
sum of credits. That is why it does not guarantee that
there are no errors. The following are the main classes of
error that are not detected by the trial balance:
• An error of original entry is when both sides of a
transaction include the wrong amount.[1] For example, if a
purchase invoice for £21 is entered as £12, this will
result in an incorrect debit entry (to purchases), and an
incorrect credit entry (to the relevant creditor account),
both for £9 less, so the total of both columns will be £9
less, and will thus balance.
• An error of omission is when a transaction is
completely omitted from the accounting records.[1] As the
debits and credits for the transaction would balance,
omitting it would still leave the totals balanced. A
variation of this error is omitting one of the ledger
account totals from the trial balance.[2]
• An error of reversal is when entries are made to
the correct amount, but with debits instead of credits, and
vice versa.[1] For example, if a cash sale for £100 is
debited to the Sales account, and credited to the Cash
account. Such an error will not affect the totals.
• An error of commission is when the entries are made
at the correct amount, and the appropriate side (debit or
credit), but one or more entries are made to the wrong
account of the correct type.[1] For example, if fuel costs
are incorrectly debited to the postage account (both
expense accounts). This will not affect the totals.
• An error of principle is when the entries are made
to the correct amount, and the appropriate side (debit or
credit), as with an error of commission, but the wrong type
of account is used.[1] For example, if fuel costs (an
expense account), are debited to stock (an asset account).
This will not affect the totals.
• Compensating errors are multiple unrelated errors
that would individually lead to an imbalance, but together
cancel each other out.[1]
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