Which of the following is a common reason for a trial balance to be out of balance?
Practice Questions
1 question
Q1
Which of the following is a common reason for a trial balance to be out of balance?
Incorrect journal entries
Missing accounts
Transposition errors
All of the above
A trial balance can be out of balance due to various reasons including incorrect journal entries, missing accounts, and transposition errors.
Questions & Step-by-step Solutions
1 item
Q
Q: Which of the following is a common reason for a trial balance to be out of balance?
Solution: A trial balance can be out of balance due to various reasons including incorrect journal entries, missing accounts, and transposition errors.
Steps: 7
Step 1: Understand what a trial balance is. It is a list of all the accounts in the general ledger with their balances.
Step 2: Know that a trial balance should always balance, meaning the total debits should equal the total credits.
Step 3: Identify common reasons why a trial balance might not balance.
Step 4: One reason could be incorrect journal entries, where the amounts entered are wrong.
Step 5: Another reason could be missing accounts, where some accounts are not included in the trial balance.
Step 6: A third reason could be transposition errors, which happen when numbers are switched around (like writing 54 instead of 45).
Step 7: Review the trial balance to find and correct any of these issues.
