Trial balance : Trial balance is the list of accounts and their debit and credit balances at a given time. It is usually prepared at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of the financial statements. Balancing of trial balance: Trial balance may balance even when any of the following errors occurs: 1) a transaction is not journalized, 2) a correct journal entry is not posted in the ledger, 3) a journal entry is posted twice, 4) incorrect accounts are used in journalizing or posting, or 5) Compensating errors are made in recording the amount of a transaction. To analyze: the errors made by book keeper and their effect in trial balance.

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Chapter 3, Problem 3.20E

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It is usually prepared at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of the financial statements.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made in recording the amount of a transaction.

To analyze: the errors made by book keeper and their effect in trial balance.

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