How do you correct a simple posting error that has upset the trial balance?

• A. Post a correcting entry by debiting the correct account and crediting the incorrect account for the same amount (or vice versa) to restore balance.
• B. Erase the erroneous entry entirely.
• C. Transfer the error to a suspense account only.
• D. Ignore and proceed.

Answer: (A)

When a simple posting error upsets the trial balance, the fix is a correcting journal entry that moves the amount from the wrong account to the correct one, keeping double-entry rules intact. You record the correcting entry for the same amount, debiting the account that should have been affected and crediting the account that was affected incorrectly (or the reverse if the error was the opposite). This restores the balance between total debits and total credits, so the trial balance aligns with the correct ledger balances. Erasing the erroneous entry isn’t appropriate because it removes an audit trail; using a suspense account hides the mistake rather than correcting it; and ignoring the error leaves financial statements misstated.