Trial Balance Errors

Introduction

Trial balance is a listing of summary debit and credit account in which the total amount of credit side equal to the total amount of debit side. In this case, trial balance will show immediately that there is an error in the posting if total debit does not equal total credit. Hence, trial balance plays an important role in checking if there are any errors in the posting into the accounts.

However, when the trial balance is in balance, it does not always mean that there is no error in the posting into the accounts at all. This is due to there is also a type of error that do not reveal in the trial balance.

Hence, there are two types of error including those that are revealed and those that are not revealed.

Errors not revealed by trial balance

The type of error in the table below will not be revealed by a trial balance (TB):

Errors not revealed by TB
Errors of omission on both sides of double entry	Example: The company forgot to post the $3,000 of utility expense Dr. [blank] Cr. [blank]
Errors of posting on both sides of double entry with the same amount	Example: Posting $3,200 transportation expense as $3,500 in the accounting entry. Dr. Transportation exp.     3,500 Cr. Cash                                             3,500
Errors of reverse posting in double entry	Example: Posting $310 maintenance expense in reverse sides as below. Dr. Cash                         310 Cr. Maintenance exp.            310
Errors of accounting principle	Example: Posting of $550 of maintenance expense to machinery fixed asset. Dr. Machinery               550 Cr. Cash                                    550

Errors revealed by trial balance

Errors that will be revealed by TB are included in the table below:

Errors revealed by TB
Errors of posting to the same side of double entry	Example: Posting both accounts to debit side for $500 expense transaction. Dr. Cash            500 Dr. Expense                   500
Errors of omission of one side of double entry	Example: Posting $2,500 rental transaction to expense account only. Dr. Rental expense     2,500 Cr. [blank]
Errors of posting where digits of number are reversed on side of double entry	Example: Posting $450 stationary expense as $540 in expense account. Dr. Stationary expense        540 Cr. Cash                                             450
Errors of original entry	Example: Making a mistake when entering a sales invoice into the sales day book.
Errors of adding up	Example: Making a mistake of totaling on debit side or credit side.