Trial Balance Errors
Definition
Mistakes that a trial balance may or may not reveal. A trial balance catches errors that unbalance debits and credits, but not errors of omission, commission, principle or compensating errors, which leave it balanced yet wrong.
Related Terms in Core Accounting
Bookkeeping vs Accounting
Bookkeeping is the systematic recording and organising of financial transactions; accounting builds on that record to classify, summarise, interpret and report. Bookkeeping is the data layer, accounting the analysis layer.
Single-Entry Bookkeeping
A simple method that records each transaction once, much like a cash book, without the matching debit and credit of double entry. It is easy but cannot produce a full balance sheet or catch many errors.
Narration
A short explanation attached to a journal entry describing what the transaction was for. Good narrations make the books auditable and help anyone reviewing the entry understand it later.
Voucher
A document that supports and authorises an accounting entry, such as a payment or receipt voucher. Vouchers provide the evidence trail behind the figures recorded in the books.
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