What are the errors which are not disclosed by the Trial Balance?
2010-03-03 at 12:48 am adminCompensating errors. E.g. A entry worth 1000 was debited instead of credited and similarly an entry of same value was credited instead of debit. This compensates the value and not reflected in trial balance.
Answer:There are so many errors that cant be seen in T/B. One is contra error at one place you have taken 54 as 45 & other place you have taken 45 as 54. This is called a contra error. If you are doing the accounts manually than totaling error on both side will match your T/B. Like this you may have written at one place 5000.00 as 6000.00 and at other place you may have done mistake as writing 7000.00 instead of 6000.00. But in computerised accounting software there the chance of mistake are nil so far the accuracy of totaling is concerned . There may be a mistake of making wrong entries by choosing wrong A/Cs Heads, such as treating expenditure as Assets or Assets as expenditure. Error of Choosing wrong heads or not making entries as per accounting principles will match the T/B , but the errors will be there.
Answer:Following errors may not disclosed by the Trial Balance:
Correct entry but with wrong amount.
Entry omitted /Entry not made in the books.
Account which should be Debited was credited and vice verse with correct amount.
Capital expenditure made but entered as revenue expenditure.
Answer:A mis-classification on some transaction would not show up as an error on the TB.
Answer:error by omission and compensating errors
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