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The Trial Balance and Correction of Errors

4 dot points across 4 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How do we write the journal entry that corrects an error, and how does the correction affect the profit?

Correct errors using journal entries and show the effect of corrections on profit
A focused answer to the O-Level Principles of Accounts outcome on correcting errors. Writing the correcting journal entry with a narrative, and tracing the effect of each correction on the reported profit.
8 min answer →

Which kinds of error leave the trial balance still agreeing, and how do they differ from errors that throw it out?

Identify the errors that do not affect the agreement of the trial balance
A focused answer to the O-Level Principles of Accounts outcome on errors. The six errors that do not affect trial balance agreement - omission, commission, principle, original entry, reversal and compensating - with examples.
8 min answer →

How does a trial balance check the arithmetic of the ledger, and why does a balanced trial balance not guarantee the books are correct?

Prepare a trial balance from ledger balances and explain its purposes and limitations
A focused answer to the O-Level Principles of Accounts outcome on the trial balance. Listing debit and credit balances, why the totals should agree, the purposes of the trial balance, and what it cannot detect.
8 min answer →

When the trial balance does not agree, how does a suspense account hold the difference until the errors are found?

Open and clear a suspense account to deal with a trial balance that does not agree
A focused answer to the O-Level Principles of Accounts outcome on the suspense account. Opening it with the trial balance difference, correcting one-sided errors through it, and clearing it to nil.
8 min answer →