Verification of accounting records Flashcards
what are some verification techniques?
trial balance
bank reconciliation statements
sales and purchases ledger control accounts
what additional transactions can occur in control accounts?
contra entries
interest charges on overdue accounts
debit balances in purchase ledger and credit balances in sales ledger
what can be done to correct errors in the double entry records?
general journal and suspense accounts
what errors are revealed by the trial balance?
addition
partial omission
transportation
unequal posting
what errors are not revealed by the trial balance?
Commission
Reversal
Omission
Principle
Original entry
Compensation
What is an error of addition?
when the numbers are added up wrong
what is an error of partial omission?
when half of the transaction is missing
what is an error of unequal posting?
when the debit side doesn’t equal the credit side
what is an error of commission?
right type of account but the wrong name
what is an error of reversal?
when an entry is debited instead of being credited and vice versa
what is an error of omission?
when the transaction is completely left out of the accounts
what is an error of principle?
the right amount but in the wrong type of account expense in revenue
what is an error of original entry?
the wrong amount is posted to the correct account
what is an error of compensation?
a mistake when calculating or recording accounts that is equal in amount to an opposite mistake so neither affects the final amount
