THE TRIAL BALANCE 63 



all credit balances, if debits and credits for each trans- 

 action have been equal. 



Trial Balance Proves What? This does not mean that 

 if a trial balance is in balance it is an absolute proof 

 of accuracy in recording transactions. It merely indicates 

 that debits and credits of equal amount have been entered. 

 There are several classes of errors that might be made with- 

 out throwing the trial balance out of balance. 



1. For example, if one neglects to record a transaction 

 at all, there is no credit entry and no debit entry made. 

 Consequently, the ledger remains in balance, but the ac- 

 counts do not reflect the true condition or progress of 

 affairs. 



2. Also, if one enters the wrong amount on both the debit 

 and credit sides it does not throw the trial balance off. 

 For example, if he pays $185 for a horse, but in error 

 debits Horse account arid credits Cash for $158, he does 

 not throw his ledger out of balance, but neither the Horse 

 nor Cash accounts show the facts. 



An error of this sort would be found in verifying the 

 cash balance. Periodically, the amount of cash on hand 

 and in the bank is calculated. It should agree with the 

 balance of the Cash account. If $185 is parted with but 

 the Cash account shows only $158 paid out, it makes the 

 cash "short," but does not affect the trial balance as long 

 as the Horse account is debited with the same amount, $158. 

 If, however, Horse account is debited with the correct 

 amount, $185, while Cash account is credited with $158, 

 both the trial balance and the Cash account are off. If 

 the Horse account is debited with the wrong amount, $158 t 

 and Cash account credited with $185, the trial balance is, 

 off, but the Cash account is in agreement with the cash 

 on hand and in the bank. 



3. If one makes an entry in the wrong account but on 

 the correct side of the ledger, it does not throw the trial 



