Errors Shown and not Shown by Trial Balance| Effect of Errors on Trial Balance
Arjun EP
Accounting Error
It is saying, ‘To err is human.’ It means human being does mistake.
The mistakes may be while recording, casting, carrying forward, posting and summarising the financial transactions.
Various types of errors are possible while maintaining the books of accounts.
Some of them are detected by trial balance.
But some errors cannot be detected from trial balance.
Generally, trial balance is the base to check arithmetical accuracy.
If the trial balance does not have equal debit and credit totals, there is an error somewhere in the records.
Errors Shown by Trial Balance
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
When errors affect the agreement of trial balance, it is called errors shown by trial balance.
The main errors are as follows:
Partial omission
When transaction recorded in journal entry but not posted in ledger is known partial omission.
Forget to carry forward is also partial omission.
Such error effects total of trial balance.
Wrong posting
When transaction amount is recorded more or less than actual, it is known wrong posting.
Suppose Rs 50,000 received from Laxmi is recorded $/₹/Rs 5,000.
Such error effects total of trial balance.
Posting on wrong side
When transaction is recorded correct in journal entry but posted in wrong side of ledger, it is known wrong posting.
Suppose goods sold to Usha $/₹/Rs 20,000.
It must be debited in Usha’s account but posted in credit side.
Such error effects total of trial balance.
Wrong total or balance
When subsidiary book is wrong totalled and balance of ledger is wrong, it is known wrong total or balance.
Such error effects total of trial balance.
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Errors Not Shown By Trial Balance
When errors do not affect the agreement of trial balance, it is called errors not shown by trial balance.
The main errors are as follows:
Complete omission
When transaction is not recorded in journal entry or not posting into ledger, it is known complete omission.
Suppose salary paid Rs 50,000 not recorded in journal entry.
Such error does not affect total of trial balance.
Wrong entry in subsidiary book
When wrong entry is made in subsidiary book, it does not affect total of trial balance.
Suppose goods sold to EP Traders $/₹/Rs 54,000 is recorded as $/₹/Rs 45,000.
Enter in wrong account
When amount of one’s account enter to another account, it is known enter in wrong account.
Suppose cash paid to Subhash $/₹/Rs 35,000 is recorded as Subas.
Such error does not affect total of trial balance.
Compensating errors
When one transaction is under-casted but other transaction is over-casted by same amount, it is known compensating error.
Suppose rent paid is under charged by $/₹/Rs 5,000 but insurance paid is overcharged by Rs $/₹/Rs 5,000.
Such error does not affect total of trial balance.
Errors of duplication
When transaction is written correct but recorded in twice (two times), it is known error of duplication.
Suppose wages paid $/₹/Rs 15,000 is recorded twice.
Such error does not affect total of trial balance.
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Accounting Equation |
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Basic Journal Entries in Nepali |
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Basic Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cash Book |
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Trial Balance & Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Final Accounts: Class 11 |
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Adjustment in Final Accounts |
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Capital and Revenue |
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Single Entry System |
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Non-Trading Concern |
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Government Accounting |
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Goswara Voucher (Journal Voucher) |
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Effect of Errors on Trial Balance
Error disagree trial balance.
However, there are certain errors which do not affect the trial balance.
Therefore, they cannot be disclosed by trial balance.
When there is whole error (complete omission, complete commission etc), the total of the trial balance will not be affected.
At the same time, when there is partial error, but one error compensates the other, then again total of the trial balance will not be affected.
This is because debit and credit will have been given equal effects though one of them is in wrong account.
Thus, we see that a trial balance can agree in-spite-of errors.
“A trial balance is not a conclusive proof of the accuracy but only proves the arithmetical accuracy of the books of accounts.”
Errors disclosed by disagreement of trial balance
Following are the main reasons of errors disclosed by disagreement of trial balance:
Omission of posting.
Omission of an account while preparing a trial balance.
Omission of under or over casting.
Omission of carry forward.
Wrong posting.
Bringing the balance of an account to the wrong side of the trial balance.
Wrong totaling.
Wrong carry forward.
Wrong balancing.
Double posting to one account etc.
Errors not disclosed by disagreement of trial balance
Following are the main reasons of errors not disclosed by disagreement of trial balance:
Errors of principle.
Errors of complete omission i.e. omission of entry altogether from subsidiary books.
Writing wrong amount in subsidiary books.
Compensating errors.
Entering a transaction in two subsidiary books.
Posting amount in correct side but with wrong amount.
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