Fundamentals of Financial and Cost Accounting · Trial Balance

Errors Disclosed and Not Disclosed by Trial Balance

Updated 10 October 2026 · Fact-checked

A trial balance only checks that total debits equal total credits. Errors that upset this equality, such as a one-sided posting or wrong addition, are disclosed. Errors that keep the totals equal, such as complete omission, errors of principle, compensating errors and errors of original entry, are not disclosed.

Understand Errors Disclosed and Not Disclosed by Trial Balance

A trial balance is a list of ledger balances. If every transaction was recorded with equal debit and credit, the two totals agree. So the trial balance tests only the arithmetic of double entry. It does not test whether the right accounts or right amounts were used.

This gives one simple question for every error: does it leave debits equal to credits? If it creates a one-sided difference, the trial balance will not agree and the error is disclosed. If the debit and credit are both wrong by the same amount, the trial balance still agrees and the error is hidden.

The main types are:

Error of omission: a transaction is left out. If it is left out completely (both debit and credit), the trial balance agrees. If only one side is left out (partial omission), it does not agree.
Error of commission: a clerical slip such as wrong amount, wrong posting, wrong totalling or posting to the wrong person's account. Some are disclosed, some are not.
Error of principle: an item is put in the wrong class, such as treating a capital item as revenue. Both sides are recorded, so the trial balance agrees.
Compensating errors: two or more errors that cancel each other out. The trial balance agrees.

So a matching trial balance is not proof that the books are correct. It only shows that the books are arithmetically balanced in debits and credits.

Key formulas to remember

Test for disclosure: Error disclosed if it changes (total debits − total credits); not disclosed if the difference stays zero; Use this test for any error in a question.
Errors NOT disclosed: Complete omission; error of principle; compensating errors; wrong account, but only if the correct side (debit or credit) is used; error of original entry (wrong amount in both debit and credit); duplicate entry on both sides; Trial balance still agrees in all these cases. A wrong account is hidden only when the debit stays a debit and the credit stays a credit.
Errors disclosed: One-sided posting; partial omission; wrong amount posted on one side only; wrong totalling or balancing; balance carried wrongly to trial balance; posting to one account on the wrong side (without a matching change on the other side); Trial balance totals will differ. The difference is put to a suspense account.

How to solve Errors Disclosed and Not Disclosed by Trial Balance questions

Use this method for any question asking which errors are or are not disclosed by the trial balance.

1Read the error and write the journal entry that was actually made, or the posting that was actually done.
2Compare it with the correct entry.
3Check whether the debit and the credit were both affected by the same amount.
4If only one side was wrong or missing, the trial balance will not agree: the error is disclosed.
5If both sides were equally affected, or the wrong amount went to both sides, the trial balance agrees: the error is not disclosed.
6For two or more errors, add up their effects on debit and credit. If they cancel out, they are compensating errors.
7Match the error to its type (omission, commission, principle, compensating) if the question asks for it.

Quickest way: One-sided or two-sided test

When to use it: Use for MCQs that ask which error will not affect the trial balance.

Ask: was only ONE account or ONE side touched wrongly? If yes, the trial balance is affected.
Ask: were BOTH sides equally wrong, or was the whole entry skipped? If yes, not affected.
Words like 'completely omitted', 'capital treated as revenue' and 'posted to the wrong account on the correct side' point to not disclosed.
A wrong account counts as hidden only if the debit stays a debit and the credit stays a credit. If the posting also went on the wrong side, check whether it is one-sided.
Words like 'not posted', 'posted twice on debit only', 'wrongly added' point to disclosed.
Eliminate options that are one-sided and pick the remaining one.

Common mistakes in Errors Disclosed and Not Disclosed by Trial Balance

Saying all errors of omission are hidden.
Students remember omission as 'not recorded' and ignore whether it is complete or partial.
Fix: Complete omission is hidden. Partial omission, where only one side is missed, is disclosed.
Thinking all errors of commission are disclosed.
The word 'clerical slip' sounds like it should break the arithmetic.
Fix: Check the sides. Posting to the wrong person's account on the correct side is hidden. A wrong amount on only one side is disclosed.
Treating an error of principle as disclosed because the entry is wrong.
Students confuse 'wrong' with 'unbalanced'.
Fix: An error of principle uses the wrong class of account but still has equal debit and credit. It is hidden.
Calling any two errors compensating errors.
Students see two errors in one question and assume they cancel.
Fix: They compensate only if the net effect on debit and credit totals is zero, for example a debit short by ₹500 and a credit short by ₹500.
Assuming a balanced trial balance means correct books.
Agreement feels like proof.
Fix: Remember that a trial balance checks only arithmetic accuracy. Hidden errors still need to be found and rectified.

Worked examples

Example 1

Which of the following errors will NOT be disclosed by the trial balance? (A) Sales book total of ₹50,000 posted as ₹5,000 to the Sales Account only (B) Purchase of goods of ₹8,000 completely omitted from the books (C) Cash received from Ravi ₹2,000 not posted to Ravi's account (D) Returns inwards of ₹1,500 posted on the debit side of Sales Returns and also on the debit side of Customer's account

Show the solution

Option A: only the credit in Sales Account is wrong, short by ₹45,000. The debit side is correct. Totals differ, so it is disclosed.
Option B: both the debit to Purchases and the credit to the supplier are missing by ₹8,000. Totals still equal, so it is not disclosed.
Option C: cash was debited but Ravi's credit was not posted. One-sided, so it is disclosed.
Option D: Sales Returns was correctly debited, but the customer's account should have been credited ₹1,500 and was debited instead. Debits are ₹1,500 too high and credits ₹1,500 too low, so debits exceed credits by ₹3,000. It is disclosed.

Answer: (B) Purchase of goods of ₹8,000 completely omitted from the books

Example 2

A bookkeeper made these errors: (i) Rent account was overcast by ₹4,000 on the debit side, and (ii) Salaries account was undercast by ₹4,000 on the debit side. Another error was that a ₹6,000 repair on the machinery was debited to Machinery Account. State whether each error affects the agreement of the trial balance and name its type.

Show the solution

Error (i): total debits are higher by ₹4,000.
Error (ii): total debits are lower by ₹4,000. Net effect on total debits is zero.
So (i) and (ii) together are compensating errors. The trial balance still agrees.
Repair is a revenue expense but was debited to a capital asset account. Credit (cash or creditor) was correct. Debit and credit totals are equal.
This is an error of principle, because a revenue item was treated as capital. The trial balance still agrees.

Answer: Errors (i) and (ii) are compensating errors and do not affect agreement. The repair error is an error of principle and does not affect agreement. None of them is disclosed by the trial balance.

Exam tips

Most MCQs ask 'which error is not disclosed'. Use the both-sides test and eliminate one-sided options first.
Memorise the main hidden types: complete omission, principle, compensating, original entry, and wrong-account errors on the correct side.
Check the word 'completely' or 'partly' in omission questions. It decides the answer.
For compensating errors, add the debit and credit effects. Equal and opposite means they compensate.
If a question asks what to do with a difference in totals, the answer is to post it to a suspense account until the errors are found.

Practice questions from Trial Balance

Errors Disclosed and Not Disclosed by Trial Balance: frequently asked questions

Which errors are not disclosed by a trial balance?

Complete omission of a transaction, errors of principle, compensating errors, posting to a wrong account on the correct side, and errors of original entry where both sides carry the same wrong amount. In all of these the total debits still equal total credits.

What is the difference between errors of commission and errors of principle?

An error of commission is a clerical slip, such as a wrong amount, wrong posting or wrong addition. An error of principle breaks an accounting rule by using the wrong class of account, such as treating a capital expense as revenue. Principle errors never upset the trial balance, while commission errors sometimes do.

What are compensating errors? Give an example.

Compensating errors are two or more mistakes whose effects cancel out. For example, Sales Account is overcast by ₹1,000 and Purchases Account is overcast by ₹1,000. The trial balance still agrees even though both accounts are wrong.

If the trial balance agrees, are the books free of errors?

No. Agreement shows only that debits equal credits. Hidden errors such as omission, principle and compensating errors can still be present.