Limitations of Trial Balance

    Subdecks (1)

    Cards (11)

    • Trial Balance
      A list of all the balances in a company's general ledger accounts
    • Limitations of the Trial Balance
      Errors that may occur even when the total of the trial balance are the same
    • Types of errors in the Trial Balance
      • Error of Omission
      • Error of Commission
      • Error of Original Entry
      • Error of Principle
      • Compensating Error
      • Error of Complete Reversal of Entries
    • Error of Omission
      No entry made for a transaction
    • Error of Commission

      Wrong name recorded for a transaction
    • Error of Original Entry
      Wrong amount of money recorded for a transaction
    • Error of Principle
      Wrong type of account used for a transaction
    • Compensating Error
      When two errors cancel out each other
    • Error of Complete Reversal of Entries
      Entries recorded on the wrong side of the account
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