6 things you need to know about the trial balance

6 things you need to know about the trial balance
The trial balance is the basis of preparing and presenting financial statements. Surprisingly, there are a few things that happen in the bookkeeping process that do not affect the agreement of the trial balance. This are discussed below.
1. Omission of transaction
When you mistakenly or deliberately omit a transaction from the records, the trial balance will still agree. The accountants called this an error of omission.
2. Transposition of figures
Even if you transpose figures in the account, the trial balance will still balance. If, for instance, you post $657 instead of $567, the trial balance will still agree.
3. Commission
The agreement of the trial balance will not be affected even if you post the money that belongs to Mary to Maryam’s account.
4. Reversal of Entry
Again, the agreement of the trial balance will not be affected if you debit account to be credited and credit account to be debited.
5. Error of Principle
Even if you post a transaction to the wrong class of account, the trial balance will still balance.
6. Compensating Errors
Lastly, if you reduce or increase the two sides of an account with the same amount, the trial balance will still balance.