Why might a trial balance be equal but incorrect?

A trial balance can be equal but still incorrect due to errors that may not affect the balance of accounts. Option C correctly identifies that if a transaction is not processed at all or if incorrect amounts are entered when recording a transaction, the total debits and credits could still appear in balance. This means the accounts may balance mathematically while being inaccurate in terms of actual financial representation.

For example, if an expense is completely omitted from the books or if a figure is entered incorrectly, the sum of the debits and credits can still agree, resulting in a balanced trial balance. However, the financial statements derived from this trial balance would not accurately reflect the company’s true financial position.

The other options present scenarios that do not logically lead to a balanced trial balance. If only major transactions are recorded, it could lead to an imbalanced trial balance due to missing minor transactions. If no transactions are recorded, there would be a zero balance in all accounts, clearly not equal. If all amounts are approximated, the figures would likely not balance accurately because they would not represent the true totals of debits and credits. Thus, option C encompasses the underlying concept of how certain transaction-related errors can lead to an inaccurate but mathematically balanced trial balance.