Principles Of Bookkeeping Controls

Question 1

Errors that are NOT revealed by a trial balance

Answer 1

Commission
Reversal
Omission
Principle
Original Entry
Compensating

Question 2

What is an error by commission?

Answer 2

Right amount, wrong account of same type
eg electricity expense recorded as stationery expense

Question 3

What is a reversal error?

Answer 3

Debits and credits are on the wrong side

Question 4

What is an omission error?

Answer 4

Completely left out

Question 5

What is a principle error?

Answer 5

Right amount, wrong account - different type
(Eg cost of fuel for van has been entered into van asset account)

Question 6

What is an original entry error?

Answer 6

Correct accounts, correct sides, but wrong amounts (on both sides)
Eg debit 52; credit 52
Instead of
Debit 25; credit 25

Question 7

What is a compensating error?

Answer 7

Two errors cancel each other out (rare)

Question 8

Outstanding lodgement

Answer 8

Cheque received by a business but not yet cleared by bank

Question 9

Unpresented cheque

Answer 9

Cheque sent to supplier not yet cleared by bank