Have you ever wondered why your trial balance doesn’t tally even when you’re sure all entries are correct? Or maybe you’ve faced a situation where an error sneaks into the books, and you can’t spot it easily?
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This content is ideal for:
- ✅ Bankers prepping for JAIIB/AFM
- ✅ Non-commerce students struggling with accounting
- ✅ Anyone who wants to strengthen their fundamentals in financial accuracy
📢 Don’t forget to hit like, comment, and share your doubts below. Let’s make accounting fun and easy together!
🎥 Watch the Full Breakdown
👉 Before we dive in, watch this video for a complete breakdown:
🧾 00:00 – Introduction to the Topic
We kick off the session with a power-packed explanation of why Trial Balance is so important in financial accuracy…
📚 00:58 – What is Trial Balance & Why is it Prepared?
- Prepared on a specific date
- Used before preparing final accounts
- Detects errors early
🧮 03:08 – From Journal → Ledger → Trial Balance
- Transactions recorded in the journal
- Posted into ledger accounts
- Balances pulled into trial balance
📊 05:14 – Format of a Trial Balance
Two types:
- Net Trial Balance: Net of debit & credit
- Gross Trial Balance: Total debits and credits separately
💡 07:48 – Features & Purpose of Trial Balance
- Detect errors
- Helps in final accounts
- Includes cash, bank, nominal, real, and personal accounts
⚠️ 10:21 – When Trial Balance Doesn’t Match (Disagreement)
If debit ≠ credit, it indicates errors such as:
- Omission
- Commission
- Principle errors
🧩 12:21 – Types of Errors in Accounting
Main Categories:
- Clerical Errors: Omission, Commission, Compensating
- Principal Errors: Violate accounting principles
🧾 13:26 – Real Examples of Clerical Errors
- Error of Omission: Missed recording a credit purchase
- Error of Commission: ₹3,000 posted as ₹30,000
- Compensating Error: Salary overcast, purchases undercast
✅ 26:47 – Why Compensating Errors are Dangerous
They don’t affect trial balance, but still misstate your books. Example:
- Salary posted as ₹52,000 instead of ₹25,000
- Purchases posted as ₹3,000 instead of ₹30,000
Both errors cancel out = Trial balance agrees wrongly!
📌 Conclusion: Tally Your Success with Accuracy!
Understanding trial balance and error rectification is like unlocking the door to financial integrity. With strong basics, AFM becomes easy!
Key Takeaways:
- Understand journal → ledger → trial balance
- Know the types of errors
- Learn rectification entries
👇 Drop your doubts in the comments and let’s grow together.
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📥 Download the PDF Notes
Want to revise on the go or keep these notes handy?
👉 Download Full Session PDF Here
(Includes examples, rectification entries, and tabular formats!)
