Trial Balance Test - 3

Wages paid for the construction of building should be treated as a capital expenditure and debited to the buildings account. Instead if it is debited to the wages account, it has been treated as revenue expenditure.

It is a statement showing the balances or totals of debits and credits of all the ledger accounts, with a view to verify the arithmetical accuracy of posting into the ledger accounts.

Trial balance is prepared after the ledger accounts have been balanced to verify the arithmetical accuracy of posting into the ledger accounts.

If all the one sided errors have been identified and rectified, then the suspense account will have to necessarily balance.

Suspense account will be opened because the identity of the account responsible for the error is not known.

 it is an error of posting because the sale has not been posted to the customer's account.

Subsidiary books record only one aspect of a transaction, either debit or credit. Error in casting of subsidiary book is therefore a one sided error which affects the agreement of trial balance.

Errors of commission always show up in the trial balance and therefore the trial balance helps to locate these errors.

It is an error of commission and will therefore be disclosed by the trial balance.

Treating capital expenditure as revenue expenditure is an error of principle.