Chapter Six: Trial Balance Overview

These flashcards cover key terms and concepts related to the trial balance and its role in accounting systems.

Trial Balance

A list of general ledger balances to check the accuracy of entries in the accounting system.

Manual Accounting System

An accounting system where transactions are recorded by hand, requiring checks for error accuracy.

Errors Revealed by Trial Balance

Mistakes that can be identified through discrepancies in the total debit and credit balances.

Double Entry System

An accounting system where every transaction is recorded with a corresponding debit and credit.

Compensating Errors

Errors where one error cancels out another, resulting in the trial balance remaining balanced despite mistakes.

Error of Principle

A fundamental error in the application of accounting principles, causing an account to be incorrectly debited or credited.

One-Sided Entry

An entry that records only a debit or a credit without the corresponding opposite entry.

Cloud Accounting Package

Software that integrates financial data and banking directly into the accounting system, allowing for real-time updates.

General Ledger

A complete record of all financial transactions over the life of an organization.

Debits and Credits

The two sides of a double-entry accounting transaction, where debits must equal credits.