Errors or omission in transferring an account balance in trial balance

Definition and explanation

This error happens when the balance of one or more ledger accounts is either wrongly transferred to the trial balance or is not transferred to the trial balabce at all. This error occurs when:

1. a wrong account balance is listed in the right column of the trial balance.
2. a correct account balance is listed in the wrong column of the trial balance.
3. an account balance is not listed in the trial balance at all.

For example, suppose the furniture account balance of $10,000 is wrongly transferred to the trial balance as $100,000. For this mistake, the total of the debit column of the trial balance will be $90,000 ($100,000 – $10,000) excess. Similarly, if the balance of the furniture account is wrongly listed in the credit column of the trial balance, the total of the credit column of the trial balance will be $20,000 ($10,000 + $10,000) excess. On the other hand, if the furniture account balance is not transferred at all to the trial balance, the total of the debit column of the trial balance will be $10,000 short.

Examples

Describe how each of the following errors would affect the trial balance:

1. The sales account balance of $50,000 is wrongly listed in the credit column of the trial balance as $5,000.
2. The purchases account balance of $30,000 is mistakenly listed in the credit column of the trial balance.
3. The building account balance of $25,000 is not transferred to the trial balance at all.
4. The balance of the interest income account is $22,000. This balance has been mistakenly listed in the debit column of the trial balance.

Solution

1. Wrong balance listed in the right column:
   The actual balance of the sales account is $50,000, not $5,000. Hence, the total of the credit column would be $45,000 ($50,000 – $5,000) short.
2. Correct balance listed in the wrong column:
   Since a debit balance has been wrongly listed in the credit column of the trial balance, the total of the credit column would be $60,000 ($30,000 + $30,000) excess.
3. Account balance not listed at all:
   Since a debit balance has not been listed in the trial balance at all, the total of the debit column would be $25,000 short.
4. Correct balance listed in the wrong column:
   Since a credit balance has been wrongly listed in the debit column of the trial balance, the total of the debit column would be $44,000 ($22,000 + $22,000) excess.