In a series of articles, I have discussed errors that will not affect trial balance. Here, let’s examine errors that do affect trial balance. Note that these mistakes will make the totals of the debit side and credit side to have different figures. Also, the errors discussed previously will affect a trial balance if it occurs on one side of double entry principle.
One sided error of Omission. Here, the data entry staff has posted the transaction in one account (say the debit side) but failed to post the other account (say credit side) to complete the double entry. In that case, the amount in the debit side will be more than that of the credit side. For example, credit sales for NGN 200,000 were entered in Account Receivable (debit entry) but not in the sales account (credit entry). This will make the debit side to be higher than the credit side by NGN 200,000.
Read: Key Errors that don’t affect trial balance: Error of Commission
One sided error of original entry. Here, the amount was recorded correctly in one account but posted wrongly in the other account. In the above example, let say the data entry staff post the correct amount in Account Receivable. That is NGN 200,000. But posted NGN 2,000,000 in the sales account. This will make the amount in the debit side to be less than that of the credit side by NGN 1,800,000. Therefore affecting trial balance.
One side transposition error. It can also occur with transposition error. Say the credit sales figure is NGN 308,000. Posted correctly in Account Receivable but posted as NGN 803,000 in the sales account. The amount in the credit side will be higher than the debit side by NGN 495,000.
Adding error in subsidiary books. Normally, transactions are posted in the ledger accounts after being raised in a subsidiary book. But if the total in the subsidiary book is wrongly added, it will make the trial balance to have discrepancy. For example, purchases day book was wrongly added as NGN 2,094,000 to purchases account. Whereas, the Account Payable shows NGN 2,587,000. This means that the amount in the debit side is less than that of the credit side by NGN 493,000.
Wrong adding of trial balance. This mistake cannot occur in electronic data processing. This is true because the computer software adds up the trial balance. So human adding errors do not arise. However, if manual or mechanical data processing applies to a business, then this error can affect trial balance. For example, when adding the amount of each account in the trial balance, the accountant mistakenly adds an amount in the debit side twice. This makes the amount in the debit side to be higher than that of the credit side.
From the above, you may have learned that errors affecting trial balance usually occur on one side of the account when applying double entry principle. The debit side may be less than the credit side and vice versa. This depends on the mistake that occurs. In electronic data processing, certain errors that may have affected trial balance will not occur because the computer software does the processing without a human assistant.