Principle Of Bookkeeping Controls Flashcards
CHAPs
Clearing house automated payment system
Used for high value payments made by electronic payments
Cant be cancelled after sent
No min or max payment limit
Cheque
Instruction in writing signed by payer telling bank to pay a named person
When receiving can be paid into bank or paid in electronically through mobile banking
Checked to make sure all details correct or it could be invalid
Bank drafts
Written out by bank and purchaser pays bank plus a charge from purchasers bank account
No min or max
Cash
Used for cash wages and for petty cash system
Debit cards
Payment taken from bank account of customer immeditaly
Credit cards
Monthly payment made in full or in part by customer
Interest charged on balance owing to credit card company
Credit limits
Error of omission
Payment completly omitted from ledgers
e.g. £10 not recorded
Error of original entry
Entry made and debit and credit correct but not the amount
e.g.£520 from credit customer recorded as £250
Error of commission
Double entry amount correct but wrong account used
e.g. wages and salaries expense incorrectly debited with rent expense of £100
Error of principle
Wrong type of account used
e.g. MV petrol expense £40 debited to non current account
Reversal of entries
Debit and credit entries on wrong side
e.g. Sale £160 included on wrong side
Compensating error
2 errors made that cancel each other out
Errors are unrelated but the fact that both occured means no imbalance on trial balance
Calculation error
Mistake made when calculating balance on ledger account
Balance transfer error
Balance on general ledger transferred wrong to trial balance
Unwqual amount error
1 side of double entry is made but error made on other side
