Archive about 'Correction of Errors'

Steps To Balance The Trial Balance

I was preparing the Trial Balance and it could not balance. Can you please tell me the steps to balance it.?

In the event that your trial balance doesn’t balance, go through the following bookkeeping tips/steps in the suggested order to ensure that the error can be detected [...]

List Of Topics Under Correction Of Errors

Click to the respective topics under Correction Of Errors

Content Page on CORRECTION OF ERRORS

Understanding Suspense Account – Its Uses and some salient points

Errors Not Affecting The Trial Balance Part 1 of 2

Errors Affecting The Trial Balance Part 2 of 2

Revision Notes [...]

Answer To Accounting Test Question COE No.2 On Correction Of Errors/Suspense Account

Append below the answer for Accounting Test Question COE No.2 on Correction Of Errors/Suspense Account:

ANSWER To Accounting Question No. COE 2 On Correction of Errors
(a) Journal entries to correct errors ( without narrations)

 

 

Debit($)

Credit($)

1

Discount Received

76

 

 

Discount Allowed

76

 

 

Suspense

 

152

 

 

 

 

2

Suspense

36

 

 

Sales

 

36

 

 

 

 

3

Suspense

6

 

 

Mr. B

 

6

 

 

 

 

4

Machinery

1,200

 

 

Stock

 

1,200

 

 

 

 

5

Mr. C

265

 

 

Suspense

 

265

 

 

 

 

6

Petty Cash

100

 

 

Suspense

 

100

 

 

 

 

7

Bank Interest Charges

720

 

 

Suspense

 

720

(b) Suspense Account

 

Debit($)

 

Credit($)

30/9/08

 

30/9/08

 

Difference as per Trial Balance

1,195

Discount Received

76

Mr. B

6

Discount Allowed

76

Sales

36

Mr. C

265

 

 

Bank Interest Charges

100

 

 

 

720

 

1,237

 

1,237

(c) Statement of [...]

Accounting Test Question No.COE No.2 On Correction Of Errors/Suspense Account

Append below an accounting test question No COE No. 2 on Correction of Errors/Suspense account:

Accounting Question Test COE No.2 On Correction Of Errors/Suspense Account

Question:
When the trial balance of XYZ Ltd as at 30/9/08 was prepared, a difference was found. A Suspense Account was created in order to achieve the balance:
Examination of the books showed the [...]

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 [...]