Archive about 'Correction of Errors'

Revision Notes On Correction Of Errors

Salient points:

Know how to explain the different type of errors which do not affect the agreement of trial balance:

Error of Omission – when a transaction is completely omitted from the books
Error of Commission-when an entry has been posted to the […]

Answer To Accounting Test Question COE No. 1 On Correction Of Errors

Answer to Accounting Test Question COE No.1:

(a) Mr. A’s Journal Entries

Item No

Date

Particulars

Dr ($)

Cr ($)

1

Dec 31

Discount Received A/c

365

Discount Allowed A/c

365

Suspense A/c

730

Being correction of Discount Allowed $365 wrongly credited to Discount Received Account

2

Dec 31

Mr TEY Account

210

Mr XY Account

210

Being correction of payments $2,100 by Mr XY wrongly credited to Mr TEY account

3

Dec 31

Drawings Account

3,600

Wages Accoount

2,640

Purchases Account

960

Being correction of […]

Accounting Test Question COE No. 1 On Correction Of Errors

Accounting Test Question COE No 1 On Correction Of Errors

Question:
Mr. A extracted a Trial Balance at 31 st December 2005 and found that it did not balance. He posted the difference to a Suspense Account. Later he found the following errors which accounted for the difference:

The total […]

Errors Affecting The Trial Balance And Suspense A/c (Part 2 of 2)

Part 1 illustrates the errors that do not affect the Trial Balance.
In this article, we shall discuss the different type of errors which affect the agreement of the Trial Balance. To make the Trial Balance agree, a suspense account is used as a balancing figure.
Earlier in my article on Suspense account, I have also explained […]

Errors Not Affecting The Trial Balance (Part 1 of 2)

This article discussed the different type of errors which do not affect the agreement of the Trial Balance.
When these type of errors are discovered, their correction is journalized in the General Journal to be posted to their respective ledgers.

Errors Of Omission

Occurs when a transaction is being COMPLETELY OMITTED from the books
Example:
A cash receipt of $500.00 […]

Understanding Suspense Account: Uses and Salient Points

USES OF SUSPENSE ACCOUNT

Suspense account can be used for the following valid reasons :
1.   It’s an account for bookkeeper to use which can be posted any difference on the trial balance pending the discovery of errors; the errors when found are corrected by debiting and crediting the suspense account. Ultimately, the suspense account is nil balance after […]