In which column of a trial balance does the sales account appear?

credit. Sales are income, so the balance is a credit.

Which of these has a debit balance in a trial balance?

drawings. Drawings, like assets and expenses, are debits.

A transaction has been left out of the books completely. This is an error of:

omission. Nothing was entered, so the totals still agree.

The purchase of a computer for use in the office was debited to the purchases account. This is an error of:

principle. An asset has been treated as an expense: the wrong type of account.

Cash received from a customer was debited to the customer and credited to cash. This is an error of:

complete reversal. The right accounts and amount, on the wrong sides.

What does it mean if a trial balance agrees?

The total of the debit balances equals the total of the credit balances. Some errors, such as omission, are not revealed.

The trial balance · Cambridge IGCSE Accounting 0452 revision

In plain words

If every debit has an equal credit, then all the debit balances in the ledger should add up to the same as all the credit balances. A trial balance is the test: a list of every balance, in two columns.

It is a useful check, but not a perfect one. Some mistakes leave the two totals equal.

6 things to know

A trial balance is a list of the balances on the ledger accounts at a certain date, with debit balances in one column and credit balances in the other.
Its purposes: to check the arithmetical accuracy of the double entry, to help find errors, and to provide the figures for the financial statements.
Debit column: assets, expenses, purchases, sales returns and drawings. Credit column: liabilities, income, sales, purchases returns, capital and allowances.
Its limitation: totals that agree do not prove the books are right. Six types of error do not affect the trial balance.
Omission: a transaction is left out altogether. Original entry: the wrong amount is entered in both accounts. Complete reversal: the right accounts are used, but the debit and credit are swapped.
Commission: the entry is in the wrong account of the right type, such as the wrong customer. Principle: the entry is in the wrong type of account, such as an asset bought being debited to an expense. Compensating: two separate errors cancel each other out.

Worked example

Repairs to a van, $250, were debited to the motor vehicles account. Name the type of error and say why the trial balance still agrees.

Repairs are an expense. Motor vehicles is an asset account. The entry is in the wrong type of account.
That is an error of principle.
A debit of $250 was still made, with a credit of $250, so the two totals are still equal.

Tips and tricks

Commission or principle? Ask whether the wrong account is the same type as the right one. Wrong customer: commission. Expense treated as an asset: principle.
"The trial balance agrees" means the totals are equal. It never means the books are free from errors.

6 questions, about 2 minutes.

It lands in your notebook with its questions as flashcards.

The trial balance: 6 questions and answers

These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.

In which column of a trial balance does the sales account appear?
- debit
- credit (the answer)
- both
- neither
Sales are income, so the balance is a credit.
Which of these has a debit balance in a trial balance?
- capital
- trade payables
- drawings (the answer)
- purchases returns
Drawings, like assets and expenses, are debits.
A transaction has been left out of the books completely. This is an error of:
- commission
- principle
- omission (the answer)
- original entry
Nothing was entered, so the totals still agree.
The purchase of a computer for use in the office was debited to the purchases account. This is an error of:
- commission
- principle (the answer)
- compensating
- complete reversal
An asset has been treated as an expense: the wrong type of account.
Cash received from a customer was debited to the customer and credited to cash. This is an error of:
- omission
- principle
- original entry
- complete reversal (the answer)
The right accounts and amount, on the wrong sides.
What does it mean if a trial balance agrees?
- There are no errors in the books.
- The total of the debit balances equals the total of the credit balances. (the answer)
- The business has made a profit.
- Every customer has paid.
Some errors, such as omission, are not revealed.

6 questions

Tap an answer and you’ll see straight away whether it’s right, and why.

Worksheet

3 questions, 6 marks. Write your answers on paper, then check them.

The trial balance

Cambridge IGCSE Accounting 0452 · 6 marks · papermunch.org

Name ______________________________ Date ______________

State two purposes of preparing a trial balance.[2]
Show answerHide answer
To check the arithmetical accuracy of the double entry book-keeping. To provide the balances needed to prepare the financial statements.
I got this one
A sale of $340 to P. Khan was debited to the account of R. Khan. Name the type of error and explain your choice.[2]
Show answerHide answer
An error of commission. The entry was made in the wrong account, but one of the right type: another customer's account.
I got this one
A purchase invoice for $95 was entered in the purchases journal as $59. Name the type of error.[2]
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An error of original entry. The wrong amount was used for both the debit and the credit.
I got this one

Answers: The trial balance

1. To check the arithmetical accuracy of the double entry book-keeping. To provide the balances needed to prepare the financial statements.
2. An error of commission. The entry was made in the wrong account, but one of the right type: another customer's account.
3. An error of original entry. The wrong amount was used for both the debit and the credit.