Question

When an account that normally has debit balance shows a credit balance, or vice-versa, it indicates ______________.

• A. an unusual transaction must have occurred
• B. an error in recording must have been made
• C. an error in recording may have been made
• D. an entry must have been omitted

Answer 1

Answer: (C)

an error in recording may have been made

Trial Balance is prepared to check and confirm whether posting of all transactions is done in the ledger. If trial balance agrees, it proves that books of account are arithmetically correct. If the total of debit and credit is not matching, it means there are some clerical error.

If an account is having a debit balance actually has credit balance or vice-versa, it indicates that an there is an error in recording.