Correction of errors

Question 1

errors of omission

Answer 1

if a transaction is completely missed out, the Trial balance will still balance but it will balance at the wrong amount

Question 2

errors of commission

Answer 2

if a debit or credit entry has been correctly posted to the correct side but to the wrong account then the trial balance will still agree but will be incorrect.

Question 3

compensating errors

Answer 3

if one account has been over added by £20 and another account has been under added by £20, then one mistake compensates another and the trail balance totals match, but 2 accounts will be incorrect

Question 4

errors of principle

Answer 4

when an item is entered in the wrong class of account eg if the purchase of an asset is debited to motor expenses instead of motor vehicles

Question 5

errors of original entry

Answer 5

if the original entry is incorrectly entered eg £24 instead of £42

Question 6

complete reversal

Answer 6

all entries for a transaction have been put in the wrong columns

Question 7

common error - closing inventory is over added

Answer 7

decrease

Question 8

common error - sales revenue has been over added

Answer 8

decrease

Question 9

common error - discount allowed is treated as discount received

Answer 9

decrease