3.9 Correction of errors

Question 1

1. What are the 7 errors not revealed by a trial balance?

Answer 1

• Transposition
• Original entry
• Principle
• Complete reversal of entries
• Omission
• Commission
• Compensating errors

Question 2

2. What is error of transposition?

Answer 2

• The error of transposition is when a number is recorded incorrectly on both sides.

Question 3

3. What is an error of original entry?

Answer 3

• the error of original entry is when an item is entered using an incorrect amount.

Question 4

4. What is error of principle?

Answer 4

• The error of principle is when an item is entered in the wrong class of account

Question 5

5. What is complete reversal of entries error?

Answer 5

• Complete reversal of entries is when the correct amounts are entered in the correct accounts, but wrong side of the account.

Question 6

6. What is error of omission?

Answer 6

When a transaction is completely omitted from the books.

Question 7

7. What is error of commission?

Answer 7

An error of commission is when a correct amount is entered but in the wrong account.

Question 8

8. What are compensating errors?

Answer 8

Compensating errors is when two or more errors are cancelled off by two other errors.

Question 9

9. What are the 5 errors affecting the trial balance agreement?

Answer 9

• Incorrect additions in any account
• Making an entry on only one side of the accounts
• Entering a different amount on the debit side from the amount on the credit side.
• Errors in writing up the trial balance.
• Account balances not picked up to the trial balance.

Question 10

10. What is suspense account?

Answer 10

an account in the general ledger in which amounts are temporarily recorded when the trial balance does not balance, as to locate and correct the errors as soon as possible.

Question 11

11. What is a whistleblower?

Answer 11

a person who exposes any kind of information or activity that is deemed illegal, dishonest, or not correct within an organization