I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART E: PREPARING A TRIAL BALANCE 

 

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(b) 

Errors of casting (adding up). The total daily credit sales in the sales day book should be 

$28,425, but are incorrectly added up as $28,825. The total sales in the sales day book are then 

used to credit total sales and debit total receivables in the ledger accounts. Although total debits 

and total credits are still equal, they are incorrect by $400.  

1.5 Compensating errors 

Compensating errors

 are errors which are, coincidentally, equal and opposite to one another. 

 

For example, although unlikely, in theory two transposition errors of $540 might occur in extracting 

ledger balances, one on each side of the double entry. In the administration expenses account, $2,282 

might be written instead of $2,822 while, in the sundry income account, $8,391 might be written 

instead of $8,931. Both the debits and the credits would be $540 too low, and the mistake would not 

be apparent when the trial balance is cast. Consequently, compensating errors hide the fact that there 

are errors in the trial balance. 

1.6 Summary: errors that can be detected by a trial balance 

 Errors 

of 

transposition 

 

Errors of omission (if the omission is one-sided) 

 

Errors of commission (if one-sided, or two debit entries are made, for example) 

Other errors will not be detected by extracting a trial balance, but may be spotted by other controls (such 

as bank and control account reconciliations).