Question

The agreement of the trial balance totals is an indication that all transactions have been properly

recorded in the books of accounts. Do you agree with this statement?

Required:

Outline 4 reasons to justify your response​

Answer 1

Answer:

NO, I do not agree with this statement.

Explanation:

So, a TRIAL BALANCE is a list in which all entries(debits and credits statement) for a particular business, firm, company or organization are kept and BALANCED. A trial balance also contains information about the organization or company's dividends, liabilities, expenses and many more.

The reason the Statement in the question is faulted is because TRIAL BALANCE does NOT prove the the record is ACCURATE, there is no guarantee that the record is ACCURATE although it shows to some extent that the record are PRECISED BUT NOT ACCURATE.

The Four Reasons to Justify the answer are;

(1). ERROR OF COMMISSION: error that occurs when amount is entered in a wrong account.

(2). ERROR OF OMISSION: error that occurs when data is being omitted.

(3). ERROR OF PRINCIPLE: error that occurs when data is recorded in the wrong ledger.

(4). COMPENSATING ERROR: this error cause offset of another error.