A transaction is completely omitted from the books of account. What is its effect on the trial balance?
Correct answer: C. It does not affect the agreement of the trial balance
- A. It causes the debit total to exceed the credit total
- B. It causes the credit total to exceed the debit total
- C. It does not affect the agreement of the trial balance
- D. It creates a permanent debit balance in suspense
Explanation
A complete omission leaves both the debit and credit aspects unrecorded. Since equal amounts are missing from both sides, the trial balance still agrees.
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About Correction of Errors and Suspense Accounts
Accounting errors are corrected by journal entries after identifying whether the mistake affects one account or both sides of double entry. Suspense accounts temporarily hold an unexplained trial balance difference and must be cleared, while errors of omission, commission, principle, original entry and reversal require different corrections.
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