What is the effect of an error in the journal entry on the trial balance?
Practice Questions
1 question
Q1
What is the effect of an error in the journal entry on the trial balance?
It will always cause the trial balance to be out of balance
It may or may not cause the trial balance to be out of balance
It will not affect the trial balance
It will only affect the income statement
An error in the journal entry may or may not cause the trial balance to be out of balance, depending on whether the error affects the equality of debits and credits.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the effect of an error in the journal entry on the trial balance?
Solution: An error in the journal entry may or may not cause the trial balance to be out of balance, depending on whether the error affects the equality of debits and credits.
Steps: 6
Step 1: Understand what a journal entry is. A journal entry records financial transactions in accounting.
Step 2: Know that each journal entry has two parts: debits and credits. They must always be equal.
Step 3: Recognize that a trial balance is a summary of all the debits and credits from the journal entries.
Step 4: Identify that if there is an error in a journal entry, it can affect the total debits and credits.
Step 5: Determine if the error makes the total debits not equal to the total credits. If they are still equal, the trial balance will be balanced.
Step 6: Conclude that if the error causes the debits and credits to be unequal, the trial balance will be out of balance.
