types of errors Flashcards
omission
where a transaction has been completely missed out- no credit or debit entry has been made.
commission
where an entry has been entered into a trade receivable or trade payable account but under the wrong company/ person name.
original entry
an error when entering the invoice into the ledger- both debit and credit entry have the same error
error of principle
an error entering into an account that would impact on profit
compensating error
2 errors made which cancel each other to by chance
reversal
a transaction entered in reverse of what it should have been
a sale/ invoice of £300 has been left out of the ledgers
omission
a payment made to A. Roberts has been entered into the A. Robertsons account
Commission
a sale of £150 as been entered into the accounts as £1500
original entry
you purchased a motor vehicle and entered it as a purchase instead of debiting the motor vehicles account
error of principle
rent should have be £100 and you debit £200
insurance should be £200 you debit £100
compensating error
cash sales have bee entered as sales revenue DR and cash CR
reversal
sales revenue overcast
decreases profit when fixed
sales revenue undercasts
increases profit when fixed
other incomes too high
decreases profit when fixed
