Day 6: Trial Balance & Errors
✅ Today you will learn
- Purpose and format of a trial balance
- Preparing it from ledger balances
- Errors that do and do not affect agreement
- Suspense account and rectification entries
- Trial balance in TallyPrime
🏢 In the real world
Every month-end, a CA firm first prints the client’s trial balance. If it does not tally, nothing else is reviewed until it does. If it tallies, they still look for the hidden errors you will learn today.
What is a trial balance?
A trial balance is a statement of all ledger balances on a date, debit balances in one column and credit balances in the other. Because every entry has equal debit and credit, the two totals must agree.
- Checks arithmetical accuracy of posting.
- Gives a summary for preparing final accounts.
- Helps locate errors quickly.
Errors – which ones does the trial balance catch?
| Error | Example | Trial balance agrees? |
|---|---|---|
| Error of omission (complete) | A credit sale of ₹5,000 not recorded at all | Yes – not caught |
| Error of commission | Payment to Ramesh posted to Rakesh’s account | Yes – not caught |
| Error of principle | Repairs to furniture debited to Furniture (asset) instead of Repairs | Yes – not caught |
| Compensating errors | Sales overcast ₹500 and Rent overcast ₹500 | Yes – not caught |
| Error of original entry | Wrong amount on invoice entered in both accounts | Yes – not caught |
| One-sided posting | Cash debited, Sales not credited | No – caught |
| Wrong side posting | Discount allowed posted to credit side | No – caught |
| Wrong totalling / balancing | Purchases total ₹63,500 written as ₹65,300 | No – caught |
Suspense account and rectification
If the TB does not agree and the error cannot be found immediately, the difference is put in a temporary Suspense A/c so work can continue. When the error is found, a rectification entry clears the suspense.
| Date | Particulars | Dr (₹) | Cr (₹) |
|---|---|---|---|
| 30-04-2026 | Suspense A/c Dr. | 1,800 | |
| To Purchases A/c | 1,800 | ||
| (Being purchases overcast by ₹1,800 rectified) | |||
| 30-04-2026 | Furniture Repairs A/c Dr. | 2,500 | |
| To Furniture A/c | 2,500 | ||
| (Being repairs wrongly debited to Furniture rectified (no suspense – TB was not affected)) | |||
| Total | 4,300 | 4,300 |
Two rectification entries
TallyPrime never accepts a voucher whose debits and credits differ, so one-sided errors cannot happen. Omission, commission and principle errors still can – which is why reviewing the TB and ledgers matters.
Trial balance in TallyPrime: Gateway of Tally → Display More Reports → Trial Balance. Press Alt+F1 for the detailed view (ledgers inside groups) and Alt+F2 to change the period.
Solved examples
Example 1: Trial balance of Rohit Stationers on 30 April 2026
| Ledger account | Dr (₹) | Cr (₹) |
|---|---|---|
| Cash A/c | 87,120 | |
| SBI Bank A/c | 39,500 | |
| Capital A/c | 2,00,000 | |
| Drawings A/c | 5,500 | |
| Purchases A/c | 63,500 | |
| Purchase Returns A/c | 2,000 | |
| Sales A/c | 38,000 | |
| Sales Returns A/c | 1,000 | |
| Furniture A/c | 25,000 | |
| Rent A/c | 6,000 | |
| Electricity A/c | 2,300 | |
| Salary A/c | 12,000 | |
| Discount Allowed A/c | 380 | |
| Discount Received A/c | 500 | |
| Commission Received A/c | 1,800 | |
| Total | 2,42,300 | 2,42,300 |
Prepared from the Day 5 ledgers – both columns total ₹2,42,300. Sai Traders and Gupta School have nil balances, so they do not appear.
Practice exercises (unsolved – answer hidden)
Try each exercise on paper or in TallyPrime first, then open the answer to check.
🏋️ Practice – do it yourself
Show solution
| Ledger account | Dr (₹) | Cr (₹) |
|---|---|---|
| Capital A/c | 2,50,000 | |
| Machinery A/c | 1,20,000 | |
| Purchases A/c | 1,80,000 | |
| Sales A/c | 2,65,000 | |
| Debtors A/c | 45,000 | |
| Creditors A/c | 38,000 | |
| Wages A/c | 22,000 | |
| Rent A/c | 18,000 | |
| Cash A/c | 15,000 | |
| Bank A/c | 96,000 | |
| Opening Stock A/c | 30,000 | |
| Commission Received A/c | 4,000 | |
| Drawings A/c | 31,000 | |
| Total | 5,57,000 | 5,57,000 |
Both sides total ₹5,57,000.
Show solution
(a) No – error of commission/principle, TB agrees. (b) Yes – TB disagrees (credit side short by ₹1,000). (c) No – error of omission. (d) Yes – debit side short by ₹1,800.🏅 Job skills unlocked today
Quick quiz
🧠 Quick Quiz – test yourself
Interview corner
💼 Interview Corner
If the trial balance tallies, are the accounts correct?
Not necessarily. Errors of omission, commission, principle, compensating errors and errors of original entry do not affect the agreement.
What is a suspense account?
A temporary account to which the difference in a trial balance is posted until the errors are located and rectified.
Summary
- TB lists all ledger balances; totals must agree.
- It catches one-sided, wrong-side and totalling errors, not omission, commission, principle or compensating errors.
- Suspense A/c holds the difference temporarily; rectification entries clear it.
Day 7: cash book (three-column) and the other subsidiary books.
Frequently Asked Questions
Is the trial balance an account?
Can TallyPrime show a trial balance that does not tally?
Tally and TallyPrime are trademarks of Tally Solutions Pvt. Ltd. This is an independent course, not affiliated with or endorsed by Tally Solutions. All business names, GSTINs and figures in the examples are fictional samples.
