Question

Which of the following errors would be detected by a trial balance?

I Discount Allowed was posted as Discount received in the Genral ledger.

II The sales assistant pocketed the cash from a cash sale and did not ring up on the register.

III A purchase of inventory on credit was recorded as a debit to the plant and equipment account and a credit to creditors.

IV A cash sale was recorded in the sales account as $237 instead of $273 but was correctly recorded in the bank account.

Select one:

a. I and IV

b. II and III

c. III only

d. IV only

e. None of the above

Answer 1

1) Discount allowed was posted as discount received : ERROR IS DETECTED BY TRIAL BALANCE

Discount allowed is debit and Discount received is credit.As debit balance is shown as credit balance ,the credit balance is increased .So, error is detected.

2)The sales asssstant pocketed the cash from a cash sale and did not ring up on the register: ERROR IS NOT DETECTED ,as the complete entry was not posted i.e no entry regarding cash received and sale made.

3)Purchase of inventory debited to plant and machinery account: ERROR CAN'T BE DETECTED, as a double entry is made but to the wrong account with correct amount.

4)Sale recorded with wrong amount in only one account :ERROR IS DETECTED , because debit and credit amount for the entry is not same

So, in I & IV errors can be detected. (a).