Trial Balance and Rectification of Errors

Trial Balance

A statement prepared with the debit and credit balances of all ledger accounts to check the arithmetical accuracy of books of accounts.

Errors of Principle

Errors that occur when fundamental principles of accounting are violated, such as treating a capital expenditure as revenue expenditure.

Errors of Omission

Errors that happen when a transaction is completely or partially omitted from being recorded in the books of accounts.

Suspense Account

A temporary account opened to put the difference in the trial balance when it does not tally, which gets eliminated once all errors are rectified.

One-sided Errors

Errors that affect only one side of an account and cause a disagreement in the trial balance, usually rectified using a Suspense Account.

Two-sided Errors

Errors that affect two or more accounts simultaneously by the same amount, leaving the trial balance tallied despite the mistake.