Banking Exam Question - What is Trial Balance? What are the Mistakes that Should be Find & Not Find from Trial Balance? Explain

Introduction - Trial Balance

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns. A company prepares a trial balance periodically, usually at the end of every reporting period. A trial adjust is a rundown of all the general record accounts (both income and capital) contained in the record of a business. This rundown will contain the name of every ostensible record account and the estimation of that ostensible record adjust. Every ostensible record will hold either a charge adjust or a credit adjust.

The balance of debit and credit is equal if the balance is equal. If there is no DR = Cr find out that there is an error. Therefore, the test for any test whether Dr = Cr has occurred or the test is called a balance test. Here are the errors that can be found from balance testing:

1. The amount of money exempted from the amount, the amount to be lost by taking any money from the initial entry
2. If the amount of business is corrected on an account and an error occurred in another account, it may be detected.
3. If the account adds a wrong error
4. Error in writing the amount of money or being misleading error
5. The amount of balance test added incorrectly

Misconceptions of finding out through balance testing:

• Discount error
• Writing error
• Theoretical mistake
• Supplemental error
• Double mistake