Plug

A plug is what appears when the balance check does not read zero and the modeller closes the gap by typing a number instead of finding the cause. It works, in the narrow sense that the model now balances, and it destroys the only self test the three statements provide.

The damage is not that the answer is wrong by the size of the plug. It is that the error the plug conceals is still there and still compounding. A capital expenditure that reduced cash without increasing fixed assets, plugged in year one, misstates depreciation, net income, tax and every ratio built on them for the whole forecast.

In an interview the equivalent is verbal. A candidate whose two sides do not agree and who adds a figure to make them agree is making the same move, and it is audible, because the number cannot be explained. Saying that the sides do not tie and retracing scores better than a fluent forced balance.

There is one legitimate cousin worth distinguishing. A revolving credit facility that draws automatically to hold a minimum cash balance is a deliberate mechanism with an economic meaning and an interest cost attached, not a plug. The difference is that it is derived from a rule you can state, and it appears in the debt schedule rather than in a corner of the balance sheet.