Topic 9: Correction Of errors

Question 1

What is the general journal?

Answer 1

A subsidiary book for recording non regular transactions such as correcting errors

Question 2

Error of omission example:
Credit sale of goods £200 on invoice to H Jarvis completely omitted from the accounting system, the error is corrected on 12 May

Answer 2

Question 3

Reversal of entries example:
A payment on 3 May by cheque of £50 to trade payable S Wright has been debited in the cash book and credited to Trade payables account. This is corrected on 12 May

Answer 3

Question 4

Error of comission example:
Credit sales of £47 have been debited to the account of J Adams instead of J Adams Ltd. Corrected on 12 May

Answer 4

Question 5

Error of principle example:
The cost of fuel £30 has been debited to the vehicles account. Error corrected on 12 May

Answer 5

Question 6

Error of original entry example:
Postages of £45 paid by cheque entered into the accounts as £54. Corrected on 12 May

Answer 6

Question 7

Compensating error example:
Rates account is overcast by £100, sales is overcast by the same amount. Corrected on 12 May

Answer 7

Question 8

When are suspense account used?

Answer 8

When there are errors which cause the trial balance not to balance