The accounting errors based on disclosure by trial balance can be of the following types:
1.Accounting Errors Shown By Trial Balance
The errors that effect the agreement of the trial balance are called the errors shown by trial balance. The following are the errors that affect the totals of trial balance.
* Partial Omission
If a transaction is recorded or posted partially in the journal or in the ledger, such an error affects the agreement of the trial balance. For example, the total of trial balance disagrees if goods costing $ 600 sold to Mr. Jack on credit is recorded in sales book but no posting is done in Mr. Jack's account. Similarly, failure to carry forward the balance of $ 5000 of the purchase return account to the trial balance also affects the totals of trial balance.
1.Accounting Errors Shown By Trial Balance
The errors that effect the agreement of the trial balance are called the errors shown by trial balance. The following are the errors that affect the totals of trial balance.
* Partial Omission
If a transaction is recorded or posted partially in the journal or in the ledger, such an error affects the agreement of the trial balance. For example, the total of trial balance disagrees if goods costing $ 600 sold to Mr. Jack on credit is recorded in sales book but no posting is done in Mr. Jack's account. Similarly, failure to carry forward the balance of $ 5000 of the purchase return account to the trial balance also affects the totals of trial balance.
* Posting A Wrong Amount In An Account
Posting a wrong amount from the book of original entry to a ledger account affects the total of trial balance. For example, cash of $ 10,000 received from National Enterprises was posted in cash book but only $ 1,000 was posted in National Enterprises' account. Such an error affects the agreement of the trial balance.
* Posting On The Wrong Side Of An Account
If an amount is posted on the wrong side of an account from the book of original entry, such an error affects the totals of trial balance. For example, stationary costing of $ 500 purchased from Chitika Stationers recorded in the journal was wrongly posted on the debit side of Chitika stationers' account.
* Wrong Casting Of Subsidiary Books And Wrong Balancing Of An Account
Incorrect totaling of subsidiary books and balancing of ledger account also result in the disagreement of the trial balance. For example, if sales return book was incorrectly totaled as $ 100 instead of $ 1,000 and if the debit side of electricity account incorrectly balanced $ 12,000 instead of $ 1,200, then the total of the trial balance is adversely affected.
2.Accounting Errors Not Shown By Trial Balance
The errors that do not affect the agreement of trial balance are called the errors not shown by trial balance. That means, the trial balance agrees if such errors exist. The following are some of the errors not shown by trial balance.
* Complete Errors Of Omission
The complete omission of recording a financial transaction in the boom of original entry or omission of posting an entry from journal to ledger accounts makes no impact on the totals of the trial balance. The totals of trial balance remain equal as no posting takes place on the debit and credit sides of accounts. For example, cash of $ 400 received from Miss Lily was omitted to record in journal. similarly, the sale of goods for cash amounting to $ 2,000 was recorded in journal but no posting was made in cash account as well as in sales account. These complete omissions do not affect the totals of trial balance.
* Posting A Wrong Amount In Subsidiary Books And Ledger
Entering a wring amount for instance $ 4,000 is purchase book for the purchase of goods costing $ 4,500 from National Trading Concern cannot reveal by trial balance.
* Posting In Wrong Account
If an amount is wrongly posted on the right side of a wrong account then the error will not be affect the agreement of trial balance. Payment of $ 3,000 made to Mr. Tom was wrongly posted on the debit side of John's account, will certainly not affect the trial balance totals.
* Compensating Errors
Compensating errors are also not shown by the trial balance. For example, $ 500 posted in the costumer's account for sale of goods for $ 5,000 and $500 posted in the supplier's account for purchase of goods for $ 5,000 compensate their affects on the trial balance as both the accounts remained short of $ 4,500 on the debit and credit sides respectively. Hence, the trial balance would still be in agreement.
* Errors Of Duplication
The errors of duplication are also not revealed by the trial balance. For example, the totals of trial balance will be in agreement even though wage of $ 500 paid for the month of June 2010 was recorded twice in cash book.