How to Locate Errors of a Trial Balance

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on May 02, 2023

Steps to Locate Errors in a Trial Balance

The errors in a trial balance can be located by taking the following steps.

First, verify the totals of both columns of the trial balance.

Second, if errors are not located, divide the difference carrying disagreement in the trial balance by 9. Through this procedure, you can locate two types of errors: transposition errors and slide errors.

Transposition errors occur if the wrong amount is posted in the trial balance. For example, if the purchases account has a balance of $8,350 but has been wrongly posted in the trial balance as $8,630, this is known as a transposition error.

Sliding errors occur when a decimal is mistakenly recorded. For example, if $3,560 is written down as $35.60, this is an instance of a sliding error.

Third, if there are still no errors, then divide the difference by 2. If the amount of debit balance is entered in credit balance or vice versa, it will show a difference of two times the amount of difference in the trial balance.

Fourth, if there are opening balance amounts from the previous year, verify them.

Fifth, check if an amount shows a balance that is equal to the difference in the trial balance.

Sixth, verify that all the balances are correctly posted in the trial balance.

Seventh, apply the following last steps:

  • Recalculate the balance of each ledger account
  • If errors remain undisclosed, verify all the postings in the ledger from the journal
  • Verify all the entries made in the journal from the vouchers available
  • Repeat the above steps until all errors are detected

Errors Highlighted by a Trial Balance

Different types of errors are highlighted by a trial balance.

First of all, if a transaction is correctly entered in the journal but one of the accounts is not posted to the ledger, the trial balance will show disagreement.

For example, if goods sold to A of $1,000 are recorded in the journal but not posted to the debit side of A's account, the debit side of trial balance will be $1,000 short.

Another type of error is that if the wrong amount is entered in the ledger from the journal, the trial balance will not agree.

For example, if goods purchased from B of $2,000 are recorded on the credit of B's account as $200, the credit side of the trial balance will be $1,800 short.

Examples of other errors highlighted by a trial balance are:

  • If the balance of an amount is incorrectly calculated and posted, the trial balance will not agree
  • If the balance of any account is not recorded at all in the trial balance, it will not agree
  • The trial balance will not agree if both sides of it are wrongly totaled

Errors Not Highlighted by a Trial Balance

It is important to recognize that some errors are not highlighted by a trial balance.

Error 1: If a transaction is not recorded in the journal, then it will not influence the trial balance. This is known as an error of commission.

For example, if goods sold to John amounting to $2,000 are not recorded in the journal, this will not make the trial balance disagree.

Error 2: Another type of error is that the trial balance will not show an error when accounting principles have been incorrectly applied (i.e., errors of principle).

For example, if carriage paid on furniture purchased is debited to the carriage account, this will not be shown by a trial balance.

Error 3: If there are group of errors and their total effect is not reflected from the trial balance (i.e., compensating errors), these will not be highlighted by a trial balance.

For example, if the rent account is $500 overcast, it may be compensated by an extra increase of $500 in the interest received account.

Error 4: When recording transactions in the journal, if a wrong amount is passed, it will not disturb the trial balance. For example, if the amount of rent paid is entered in the journal as $2,000 instead of $3,000, the trial balance will not show disagreement.

Error 5: If a transaction is recorded twice in the journal, this will not affect the agreement of the trial balance. For example, if goods sold to John worth $5,000 are entered twice in the journal, this will not disrupt the trial balance.

Error 6: The trial balance will not be disturbed by errors where transactions are correctly entered in the journal but the wrong account is posted in the entry.

For example, if goods are purchased from Harry amounting to $500, which are wrongly replaced by Harry, it will not disturb the trial balance.

How to Locate Errors of a Trial Balance FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.