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Errors detected by the trial balance

This step explains the different types of errors which cause an imbalance in the Trial Balance.

Watch the video above to hear the Kaplan tutor talk through this type of error.

The following types of error will cause a difference in the trial balance, and therefore will be detected by the trial balance. They can be investigated and corrected using a suspense account, which we come onto later this week.

A single entry

If only one side of a double entry has been made then this means that the trial balance will not balance. For example, if only the debit entry for receipts from receivables has been made then the debit total on the trial balance will exceed the credit balance.

A casting error

A casting error is where a list of items has been incorrectly totalled up, or a ledger balance has been balanced incorrectly. If this has only been applied to one balance, or to one side of the trial balance, this will mean that the trial balance will not balance.

A transposition error

If an amount in a ledger account or a balance on a ledger account has been transposed and incorrectly recorded then the trial balance will not balance. For example, a debit entry was recorded correctly as £5,276 but the related credit entry was entered as £5,726.

An extraction error

If a ledger account balance is incorrectly recorded on the trial balance – either by recording the wrong figure or putting the balance on the wrong side of the trial balance – then the trial balance will not balance.

An omission error

If a ledger account balance is inadvertently omitted from the trial balance then the trial balance will not balance.

Two entries on one side

If a transaction is entered as two debits or two credits then the trial balance will not balance.

Next step

In the next step we will look at the second type of error – one which is undetected by the trial balance.

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Controls within an Accounting System

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