What is the effect of an error in the trial balance on the financial statements?

What is the effect of an error in the trial balance on the financial statements?

Step 1: Understand what a trial balance is. It is a list of all the accounts and their balances in the accounting system.
Step 2: Know that the trial balance is used to check if total debits equal total credits.
Step 3: Realize that if there is an error in the trial balance, it means the totals do not match.
Step 4: Understand that financial statements (like the income statement and balance sheet) are prepared using the trial balance.
Step 5: Recognize that if the trial balance is incorrect, the financial statements will also be incorrect.
Step 6: Conclude that errors in the trial balance can lead to misleading information in the financial statements.

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