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What happens if an account is omitted from the trial balance?

Practice Questions

Q1
What happens if an account is omitted from the trial balance?
  1. The trial balance will still balance
  2. The trial balance will be out of balance
  3. It will not affect the financial statements
  4. It will only affect the cash flow statement

Questions & Step-by-Step Solutions

What happens if an account is omitted from the trial balance?
  • Step 1: Understand what a trial balance is. A trial balance is a list of all accounts in the accounting system with their balances.
  • Step 2: Know that all debits and credits should equal each other in a trial balance.
  • Step 3: If an account is omitted, it means that one side (debits or credits) is missing a number.
  • Step 4: When you calculate the total of the trial balance, the missing account will cause the totals to not match.
  • Step 5: This mismatch indicates that there is an error, and the trial balance is 'out of balance'.
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