UPSC One
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2023 · Q63

Which of the following errors is not detected by Trial Balance?

General Accounting Principles, Auditing and InsuranceRecording transactions
  1. AA credit purchase of ₹ 1,000 from Mr. Singh is credited wrongly to the account of Mr. Akash
  2. BA credit purchase of ₹ 20,000 from Mr. Sandhu is recorded in the day book as ₹ 2,000
  3. CConversion of a temporary shed into a recorded permanent building is as repairs and maintenance expense.
  4. DError in posting from the book of subsidiary record to the ledger

Explanation

Recording the conversion of a temporary shed into a permanent building as repairs and maintenance is an error of principle, a capital-versus-revenue misclassification. Equal debits and credits are still posted, so the trial balance tallies and the error goes undetected; it is the classic example of an error not disclosed by the trial balance. Hence C.