Question

Roderigo then wants to know whether you understand the impact of errors on the trial balance. if there are errors in the accounts in the general ledger, the trial balance:

Answer 1

The trial balance is an error checking step that helps companies using double entry accounting to locate errors in their ledgers. In double entry accounting, each debit has a corresponding credit which means that incomes are allocated to match savings of expenditures. A trial balance tallies all credits and matches them against debits. If the credits do not match the debits, a discrepancy account is created with and entry to offset the imbalance. Next, the ledgers are reviewed to reduce and ultimately eliminate the discrepancy.