PART B

A trial balance is a list of all accounts in the general ledger and their balances at a specified point in time or at a given date. All the debit balances are added together to arrive at an amount for Total debits and all the credit balances are added together to arrive at the Total credits. If the value of Total Debits is equal to the value of Total credits then this is commonly referred to as the trial balance balances or the trial balance is in equilibrium.

This would mean that the method of the double entry system has been implemented accurately. However, it would be incorrect to believe that because the trial balance is in equilibrium there are no errors or omissions in that accounting system. There are errors and omissions that will not be identified by a trial balance that is in equilibrium.

Required:

Identify at least four types of errors and /or omissions that would NOT be identified by a trial balance that is in equilibrium. Provide a brief description of each one or present examples of transactions being recorded in a way that will still allow the trial balance to balance.