The Trial Balance Flashcards
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Why is the trial balance used?
TO make sure that for every amount debited there is an equal amount credited.
What errors must a Trial Balance not include?
An Omission
A Commission
A Reversal of entry
A principle
An Original Entry
What is An Omission?
A transaction that is not recorded at all
What is a Commission?
When you post a debit or credit to the correct side of the ledger, but to a wrong account
What is a Reversal of entry?
When you swap the debits and credits around for a transaction
What is a Principle
When an item is entered into the wrong class of account
What is an Origianl entry
When the original figure is wrong but it is posted correctly
What is a suspense account?
A suspense account is a temporary account which is opened because either:
The bookkeeper does not know where to post one side of a transaction
A trial balance does not balance (due to posting or addition errors)
How can you ‘fix’ a Suspense Account?
When the error has been located, it can be correct by a journal entry and the suspense balance is cleared.
A suspense account posting is always temporary.
