Question

Rinaldo then wants to know whether you understand the impact of errors on the trial balance. If there are errors in the accounts in the general ledger, the trial balance:

Answer 1

Answer: c. may or may not balance

Explanation:

Even though there are errors in the General Ledger, it is not a given that the Trial Balance will not balance. The purpose of the Trial balance is to match the debits in the company to the credits. This means that if the errors in the General Ledger were still put on the correct side then the Trial Balance would still balance.

For instance, if utility expenses were debited to Purchases in error, both accounts fall on the debit side of the Trial Balance so the Trial Balance would still balance regardless of the error.