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TRIAL BALANCE, RECTIFICATION OF ERRORS AND ADJUSTING & CLOSING ENTERIES
What is a Trial Balance and what is its primary purpose?
A Trial Balance is a statement listing all ledger account balances (debit and credit) at a specific date. Its primary purpose is to verify the arithmetical accuracy of ledger postings by confirming that total debits equal total credits.
What is the format of a Trial Balance?
Two columns listing all debit and credit balances from ledger.
Which type of errors are NOT revealed by a Trial Balance?
Errors of omission, errors of commission, errors of principle, and compensating errors are not revealed by a Trial Balance. These errors still leave total debits equal to total credits, so the Trial Balance agrees despite the mistake.
Which principle ensures that Trial Balance totals must always agree?
Double-entry bookkeeping principle — every debit has equal credit.
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