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What is the effect of a double entry error on the trial balance?

Practice Questions

Q1
What is the effect of a double entry error on the trial balance?
  1. It will still balance
  2. It will cause an imbalance
  3. It will not affect the trial balance
  4. It will only affect the income statement

Questions & Step-by-Step Solutions

What is the effect of a double entry error on the trial balance?
  • Step 1: Understand that in accounting, every transaction has two sides: a debit and a credit.
  • Step 2: Know that the trial balance is a summary that lists all the debits and credits to check if they are equal.
  • Step 3: A double entry error happens when a transaction is recorded incorrectly, affecting either the debit or the credit side.
  • Step 4: When there is a double entry error, the total debits will not equal the total credits.
  • Step 5: This imbalance in the trial balance indicates that there is an error that needs to be fixed.
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