Financial Accounting · Trial balance

Errors the Trial Balance Does Not Reveal

Updated 11 October 2026 · Fact-checked

A trial balance only checks that total debits equal total credits. Six errors keep it balanced: omission, commission, principle, original entry, compensating errors and reversal of entries. In each, the debits and credits stay equal, so you find them by checking accounts, amounts and classification, not by the totals.

Understand Errors the Trial Balance Does Not Reveal

A trial balance lists every ledger balance and checks that total debits equal total credits. Double entry means each transaction has equal debits and credits. If the totals agree, the arithmetic of the postings is probably right. It does not prove the ledgers are correct.

Some mistakes break the equality of debits and credits. A one-sided entry or a wrong amount on one side are examples. These create a difference, which you park in a suspense account. This page is about the other group: errors where debits still equal credits.

There are six. An error of omission means a transaction is left out completely, so neither debit nor credit is posted. An error of commission means the right type of account but the wrong account, such as debiting one customer instead of another. An error of principle means the wrong class of account, such as treating a capital item as an expense. An error of original entry means the same incorrect amount was used for both the debit and the credit, such as $450 posted as $540 on both sides. Because both sides carry the same wrong figure, the totals still agree. A compensating error means two separate errors of equal size, one on each side, cancel out. A reversal of entries means the debit and credit were posted to the correct accounts but on the wrong sides.

The difference between commission and principle is the key test. Commission: the wrong account within the same category (for example, the wrong expense account). Principle: the wrong category (for example, an asset posted as an expense).

Because there is no trial balance difference, no suspense account is needed. You correct each error with a journal that fixes the accounts directly.

Key formulas to remember

What the trial balance proves: Total debit balances = Total credit balances; This proves only that postings balance. It does not prove the right accounts or amounts were used.
Error of omission: Transaction missed entirely: no debit, no credit; Correct by posting the full entry that was missed.
Error of commission: Right category, wrong account: Dr correct account, Cr wrong account (or the reverse); Correction moves the amount between two accounts of the same type.
Error of principle: Wrong category of account, e.g. capital item posted to expenses; Correction moves the amount between asset and expense (or similar). Profit changes.
Error of original entry: The same wrong amount used for both the debit and the credit, e.g. $450 posted as $540 on both sides; Correct only the difference between the right and wrong amounts.
Compensating errors: Excess debit of X in one account offset by excess credit of X in another account; Identify and correct each error in its own account. Post the two corrections together in one balanced journal.
Reversal of entries: Correcting entry: debit the account that was wrongly credited and credit the account that was wrongly debited, for 2 × the original amount; Undo the wrong entry and post the right one, so the net effect is twice the amount.

How to solve Errors the Trial Balance Does Not Reveal questions

Use this method for any question asking which error is not revealed by the trial balance, or asking you to correct one.

1Work out what the correct double entry should have been for the transaction.
2Work out what was actually posted, including accounts, amounts and sides.
3Compare the two. Ask whether debits still equal credits after the mistake. If yes, the trial balance will not reveal it.
4Name the error: missing entirely is omission; wrong account of the same type is commission; wrong type of account is principle; wrong amount on both sides is original entry; sides swapped is reversal; two offsetting mistakes is compensating.
5Write the correcting journal. Reverse the wrong effect and post the right one, netted into one entry where you can.
6Check no suspense account is used, since the trial balance already balanced.
7If asked about profit, see whether an expense or income account changed, and adjust profit by that amount.

Quickest way: Does the trial balance still balance?

When to use it: Use this for multiple-choice questions asking which error would not be detected, or which error will cause a trial balance difference.

For each option, ask: after this mistake, are total debits still equal to total credits?
If only one side is wrong (single entry, wrong amount on one side, double debit), there is a difference. Rule it out.
If both sides move together or the entry is entirely missing, there is no difference. Keep it.
Match the wording: wrong account same type is commission; wrong type is principle.
For multiple response questions, select exactly the stated number of options.

Common mistakes in Errors the Trial Balance Does Not Reveal

Confusing error of commission with error of principle.
Both involve posting to the wrong account, so they sound alike.
Fix: Ask whether the wrong account is of the same type. Same type is commission. Different type, such as asset versus expense, is principle.
Thinking a one-sided entry leaves the trial balance balanced.
Students learn that some errors are hidden and wrongly assume that all errors are hidden.
Fix: A one-sided entry or a different amount on each side creates a difference. Only errors that keep debits equal to credits are hidden.
Correcting a reversal of entries with the original amount instead of double.
The entry looks like it only needs reversing once.
Fix: You must undo the wrong posting and make the right one. So the correcting debit and credit are each twice the original amount.
Using a suspense account for errors that do not affect the trial balance.
Students link all corrections to suspense.
Fix: Use suspense only when there is a trial balance difference. Otherwise correct directly between the accounts involved.
Ignoring a compensating error, or correcting only one of its two parts.
The net effect on the trial balance is nil, so it feels like nothing to fix.
Fix: Find and correct both errors, each in its own account. Each correction on its own is one-sided, so post them together in one balanced journal.
Forgetting the effect on profit of an error of principle.
Students focus on the journal and skip the statement effects.
Fix: If an expense account changes, profit changes. For example, capital expenditure wrongly expensed means profit is understated.

Worked examples

Example 1

A business bought a machine for $5,000 on credit. The bookkeeper debited the purchases account and credited the payables account. Name the error, state whether the trial balance would reveal it, and give the correcting journal.

Show the solution

Correct entry: Dr Machinery (non-current asset) $5,000, Cr Payables $5,000.
Actual entry: Dr Purchases $5,000, Cr Payables $5,000.
Debits still equal credits, so the trial balance balances and does not reveal the error.
A non-current asset was treated as an expense, which is a wrong category of account. This is an error of principle.
Correction: Dr Machinery $5,000, Cr Purchases $5,000.
Purchases were overstated by $5,000, so cost of sales was overstated and profit was understated by $5,000.

Answer: Error of principle, not revealed by the trial balance. Journal: Dr Machinery $5,000, Cr Purchases $5,000. Profit increases by $5,000.

Example 2

The sales account was credited with $300 too much because of an addition mistake. Separately, the rent expense account was debited with $300 too much because of an unrelated posting mistake. The trial balance still balanced. Name the type of error and give the correcting journal.

Show the solution

Error 1: the sales account has $300 too much on the credit side, so sales are overstated by $300.
Error 2: the rent expense account has $300 too much on the debit side, so rent expense is overstated by $300.
The two errors are the same size and on opposite sides, so total debits still equal total credits. This is a compensating error.
Correcting error 1 on its own means a debit of $300 to Sales, to remove the excess credit.
Correcting error 2 on its own means a credit of $300 to Rent expense, to remove the excess debit.
Each correction is one-sided by itself, but together they balance. Post them in one journal: Dr Sales $300, Cr Rent expense $300. No suspense account is needed.
Profit effect: the sales error overstated profit by $300 and the rent error understated it by $300, so profit was correct overall. After correction, sales fall by $300 and expenses fall by $300, so net profit is unchanged.

Answer: Compensating error of $300. Journal: Dr Sales $300, Cr Rent expense $300. Profit is unchanged.

Exam tips

In objective test questions, start by checking whether debits still equal credits. That one test removes most wrong options.
Learn the wording for each error type. Examiners use the exact names omission, commission, principle, original entry, compensating and reversal.
For a reversal of entries, write the correction as twice the original amount. Number entry questions often test this.
When a question asks about profit, check whether the wrong account is an income or expense account. Errors between two balance sheet accounts leave profit unchanged.
In multiple response questions, select exactly the number of answers requested. Do not guess extra options.

Practice questions from Trial balance

Errors the Trial Balance Does Not Reveal in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Errors the Trial Balance Does Not Reveal: frequently asked questions

What errors does a trial balance not reveal?

Errors of omission, commission, principle, original entry, compensating errors and reversal of entries. In each case debits still equal credits, so the totals agree. You find them through reviews, reconciliations or by checking source documents.

What is the difference between an error of commission and an error of principle?

An error of commission posts to the wrong account of the correct type, for example the wrong customer account. An error of principle posts to the wrong type of account, for example an asset treated as an expense. Principle errors change profit when an income or expense account is involved; commission errors between accounts of the same type generally do not change profit.

Can you give a compensating error example?

If the sales account is overstated by $200 and the rent expense account is also overstated by $200, one is a credit error and one is a debit error. They cancel in the trial balance. You must correct each account separately.

Do these errors need a suspense account?

No. A suspense account holds a trial balance difference, and these errors cause none. You correct them with a journal directly between the accounts affected.