State the limitations of trial balance?
The limitations of trial balance are as follows:
The tallying of trial balance is not a conclusive proof of the accuracy of the accounts. It only ensures that all debits and the corresponding credits have been properly recorded in the ledger.
There are certain errors that do not affect the trial balance, meaning even if the trial balance tallies, there may still be errors present in the books of accounts. Thus, agreement of debit and credit totals does not guarantee complete accuracy of accounting records.
Explanation
The context clearly states in section 6.2 that 'the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts.' It also mentions that 'It only ensures that all debits and the corresponding credits have been properly recorded.' The opening line of the context states 'These errors do not affect the trial balance,' indicating that certain errors remain undetected even when the trial balance tallies.