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Hello Sir,
please help me to understand the below question
Which of the following would be highlighted by extracting a Trial Balance?
(1) Transposition error was made when debiting the depreciation expense
(2) The Cash balance does not agree with bank statement balance
(3) Sundry Income has been Debited to the statement of profit/loss and correctly posted to the cash a/c.You need to watch our free lectures because all of these errors are explained (together with the effect on the trial balance). I obviously cannot type out all of our free lectures here.
1. A transposition error is when a numbers are switched round (e.g. 123 is accidentally entered as 132)
2. The cash balance will not agree with the bank statement because of unpresented cheques and lodgements not credited (you need to watch our lecture on bank reconciliations). That is not relevant because it is the cash balance that appears on the trial balance.
3. Sundry income is a credit and not a debit.
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