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Question
Which of the following errors will not be revealed by the trial balance?
Which of the following errors will not be revealed by the trial balance?
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Solution
The correct option is C Posting a correct amount in the wrong account but on the correct side
When a correct amount is posted to the correct side but to the wrong account, the trial balance will tally. In this case, the overall effect remains the same only posting is wrong.For example, for cash sales, instead of debiting cash account, the debtors account is debited with the correct amount. In this case, the net effect will be unchanged. Cash account here will have a lesser debit balance, debtors account will have more debit balance and sales account balance remains the same. When these balances are transferred to the trial balance there is no effect on its agreement.
When a correct amount is posted to the correct side but to the wrong account, the trial balance will tally. In this case, the overall effect remains the same only posting is wrong.
For example, for cash sales, instead of debiting cash account, the debtors account is debited with the correct amount. In this case, the net effect will be unchanged. Cash account here will have a lesser debit balance, debtors account will have more debit balance and sales account balance remains the same. When these balances are transferred to the trial balance there is no effect on its agreement.
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