Practice question · Multiple choice
A trial balance balances perfectly and the accounts still contain errors. Which class of error does it structurally miss?
Hints
- Ask what condition the trial balance actually tests.
- Post a purchase to the wrong expense account. Does the total still balance?
Show the answer
C. Any error that keeps debits equal to credits
Why
The test is 'do the two columns sum equally', so anything symmetric slips through, wrong account, wrong amount on both sides, omitted entirely. It catches one-sided slips and transpositions in a single entry, which is worth having and is a much narrower guarantee than 'the books are right'.
Practise The Accounting Cycle
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More questions on The Accounting Cycle
- The trial balance balances perfectly. Can we be sure there are no errors?
- Which accounts are zeroed out during the closing process?
- The closing entry transfers the net profit or loss into the retained earnings account.
- At period end, revenue and expense accounts are closed to zero while assets and liabilities carry forward.…
- Order the accounting cycle.
- Temporary or permanent? Sort each account.
- Match each source document to the transaction it evidences.