Explained: Reasons for disagreement of a Trial Balance

Errors in Trial Balance are mistakes made during the accounting process that cannot always be detected by the trial balance.  A trial balance can disagree due to a number of errors. Here we discuss the possibilities of how a trial balances differences.

If there is a non-agreement of trial balance the possible reasons could be the following:

• It may be a totaling error in the debit and credit balances in the trial balance.
• It may be a total error in the subsidiary books.
• It may be a posting error in the total of subsidiary books.
• It may be the error in showing account balances in the wrong column of the trial balance, or the wrong amount.
• It can be an omission showing an account balance in the trial balance.
• It can be an error in the calculation of a ledger account balance.
• It may be the error while posting a journal entry: a journal entry may not have been posted properly to the ledger, i.e., a posting made either with the wrong amount on the wrong side of the account or in the wrong account.
• It may be an error in recording a transaction in the journal: making a reverse entry, i.e., the account to be debited is credited and the amount to be credited is debited, or an entry with the wrong amount.
• It may be the error in recording a transaction in a subsidiary book with the wrong name or the wrong amount.

Keeping in view the nature of errors, all the errors can be classified into the following four categories:

• Errors of Commission • Errors of Omission• Errors of Principle • Compensating Errors

The objective of preparing the trial balance is to double-check the process to test the accuracy of posting. If the trial balance agrees it proves that the books are arithmetically accurate, and the two aspects of the transactions (Debit and Credit) have been recorded in the books of original entry as well as in the ledger.