Question

"Agreement of trial balance is not conclusive proof for arithmetical accuracy of books of account ." Support this statement with five arguments.​

Answer 1

The following classes of errors are not disclosed by the trial balance:

1. Errors of omission: When a transaction is not recorded at all or partially recorded in the book of original entry, both its debit and credit aspects would be omitted.

2. Errors in the book(s) of original entry: The trial balance would not be affected it an entry is in a wrong book of original entry or entered in the proper subsidiary book but with a wrong amount.

3. Errors of commissions: Such errors consist of entries of the transactions in a wrong account of the same class.

4. Errors of Principle: An item of nominal account entered into a real account or vice versa.

5. Compensatory errors: These errors, also called self-balancing or equalizing errors, do not affect the agreement of the trail balance because errors on one side of the ledger account are compensated by errors of the same amounts on the other side

Answer 2

Explanation:

♥Trial Balance is not a complete proof of arithmetical accuracy of account.

♥A Trial Balance in which the credit and debit accounts match does not prove that, all transactions have been recorded in the proper account

♥♥♥Errors of Omission: If a transaction is completely omitted, there will be no effect on the Trial Balance.

♥When a transaction goes completely unrecorded in both aspects or a transaction after being recorded in the books of primary entry is not at all posted in the ledger, the error is an error of omission