• 1 Marks

FA – Nov 2020 – L1 – SA – Q19 – Trial Balance: Usefulness and Limitations

Identifies an error that would be discovered when extracting a trial balance.

Which of the following errors would be discovered by extracting a trial balance?
A. A transaction has been completely missed in the accounts
B. The double entries have been made the wrong way around
C. Different figures have been entered for the debit and credit entries
D. An expense item has been posted to a non-current asset account
E. A credit sale made to Joke Ventures was debited to Joke Enterprises account

C. Different figures have been entered for the debit and credit entries

Explanation:
A trial balance is a tool used to check the arithmetical accuracy of the double-entry system. If different figures are entered for the debit and credit sides of a transaction, the trial balance will not balance, revealing this type of error. Other errors listed, such as errors of omission or reversal, would not be revealed by extracting a trial balance.

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