TRIAL BALANCE AND RECTIFICATION OF ERRORS IMPORTANT QUESTIONS
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What is a Trial Balance?
A Trial Balance is a statement prepared at the end of an accounting period listing all ledger account balances to verify that total debits equal total credits.
What are the two sides of a Trial Balance?
Debit side and credit side with equal totals.
What is the primary purpose of preparing a Trial Balance?
The primary purpose is to check the arithmetical accuracy of ledger postings and ensure that the double-entry bookkeeping principle has been correctly applied.
Which accounting errors are disclosed by a Trial Balance?
One-sided errors like wrong totals or posting omissions.
Which errors are NOT revealed by a Trial Balance?
Errors of omission, errors of commission, compensating errors, errors of principle, and complete reversal of entries are not revealed by a Trial Balance since both sides remain equal.
What is meant by an error of original entry?
Wrong amount recorded in the original book of entry.
What is an Error of Omission?
An Error of Omission occurs when a transaction is completely omitted from the books of accounts, affecting both debit and credit equally, so the Trial Balance still agrees.
What type of error occurs when a transaction is posted to a wrong account of the same class?
Error of commission in wrong account posting.
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