Page 75 - Office Practice and Accounting 10

iv. If balancing is wrong in ledger: While using balance method, the balancing
figure is transferred to trial balance but if balancing is wrong there will be
disagreement in trial balance.
v. If same account is posted twice: Sometimes an error occurs if any entry is
posted twice in one account which causes the disagreement of trial balance. For
e.g., furniture purchased for Rs. 5000 correctly posted in furniture account but
posted twice in cash account.
vi. If total of ledger is wrong: Due to the wrong totaling of ledger, trial balance
fails to agree.
vii. If amount is posted in wrong side of trial balance: Amount from ledger should
be transferred to respective sides of trial balance but if amount is transferred to
wrong side, trial balance does not agree.
viii. If amount is not posted in trial balance: If the amount is omitted to record in
trial balance, it does not agree.
ix. If wrong calculation is done in trial balance: Wrong totaling in trial balance is
another cause for disagreement of trial balance.

2. Errors not disclosed by trial balance
Although disagreement of trial balance always signals the presence of error, its
agreement does not assure a conclusive proof as to the absolute accuracy of the books,
there are some kinds of errors which do not affect the agreement of trial balance
known as errors not disclosed by trial balance. Following are the examples of such
errors :
i. Errors of omission: Errors of omission refer to not recording in the books of
account, either wholly or partially. When a is transaction altogether omitted
from the record, the error may be difficult to detect because it will not affect
the total of trial balance. E.g goods of Rs. 700 purchased but not recorded in
the book is called total omission. Furniture of Rs. 12,000 purchased recorded
in journal book but has not been posted in both of ledger account is partial
omission.
ii. Errors of commission: When incorrect entries are made in the books of original
entry or ledger account, either wholly or partially, the errors are known as errors
of commission. This error includes wrong entries, wrong posting of numerical
figures. E.g. goods of Rs. 700 purchased recorded as Rs. 7000.
iii. Compensating error: When one error is compensated or overlapped by another
error of same amount such error is known as compensating error. E.g. payment
of salary Rs. 6000 is recorded in debit correctly but as Rs. 600 in credit and
payment of commission Rs. 600 recorded again correctly in debit but recorded
Rs. 6000 in credit. Here in first case, credit side is less recorded by Rs. 5400
wrongly but next time again wrongly ,cash is over recorded by Rs. 5400 which
compensates the previous error.

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