ERROR

Every debit entry needs a corresponding credit

entry
Every credit entry needs a corresponding
debit
entry
Types OF ERRORS

1 ERROR OF Omission Where a transaction is

books
completely omitted from the

E Sale of goods to MR Tom amounting to

g
100 has been completely omitted from
the books
Rectifying CorrectionEntry
DR Mr Tom DEBTOR 100 CurrentAssett
CR SALES 100 Profit
income

2 ERROR OF Commission When a correct amount is entered

in a wrong person's account

Eg Purchase
of goods from MR TomJawold 50
was entered in error in Nr TomJohnaccount

OriginalEntry ErrorEntry RectifyingENTRY

Wrona Correcting
DR
Purchases
50 Dr Purchases 50 Dr Tom'JoHn 500
CR TOMJARROLD g a Tomyoung CR TOMJARROLD 50
Tradable creditor Gerrity
DR TomJARROLD CR DR Tom JOHN CR

Purchaser 50 ERROR 50 Purchases 50

Corrected

3 ERROR OF Principle when an item is entered in

account
wrong class
of duvet

E.g Purchase of Machinery E 100 is wrongly debited

1

to purchases account
incomestatement expense

ORIGINAL ERROR set

Rectifying
Dr Machinery1024
1
Dr Purchaser 100 DR Machinery100
er BANK 100J CR BANK 10CR Purchaser10
expenses Profit
MOTORVehicle
2 E.g Purchase
of wrongly debited to
motor vehicle 10
resent by
ORIGINAL ERROR Rectifying
MOTORVehicle 10 DR.MG Vaelpiendge10Dr.NoToRVehicE1
BANK 10 BANK 10 CRMOTORVehicle 10
Cr
 uTiamm a PfitT
4 COMPENSATING TERROR Where errors cancel each other
out
Eg sales account is ovÉrÉEeeintotalsum
E100 and isalso the office expense account
Original ErrorWrong Rectifying
Smelt
NA Dr Sales 100
fight ctticerenensetojoakcn.off.ci
CR Sales expense 100

5 ERROR OF ORIGINAL ENTRY

where the original
number in is incorrect but
figure entry
heads are correct
double entry
Tradereceivables

Eg enteredsale jE150 made to 1Y2 were

N 105
ERROR
Original Rectifying
D R Éᵈ150 DR.HR XYZ105 Dr Mr XYZ45
Sales 150 Cr Sales 105 Cr Sales 45
It means sales are understated 45 It
other
needs another 45 150 105
by
wording
of recording
45 made to
sales are understated
EgMR by
XY 2
Rectifying ENTRY
DR MR XYZ 45
CR Sales 45
 6 Complete Reversal Entries Where the
of
correct amounts are used but each item
is shown on the wrong side of the account
Eg chequepaid to MRWASEEM againstgoodspurchased
to 100
was in error wrongly debited
amounting
to BANK and credited to MRWASEEM
Original ErrorWrona Rectifying

Wrongside
DR MrWaseem100 MrWaseem100
CR Bank 100
ftp.T amff BANK 100

Read Dr MRWaseem100
OILY CR BANK 100
Final
RectifyingEntryDG.Mbiwicm223

E.g2 A payment of cash 20 to Ms Fatima was

entered the receipts side the Cash Book
on
of
in and credit Ms FatimaAccount
Oriana Nm Rectifying

DRMsFatima Cash 20 MsFatima40

CRCash 20 Ms T Cash 40

Dr ac.jms.fatmmp20
 error

ReTFIzg To
6 Transposition ERROR where the sequence
wrong
the individual characters within a
ofnumber was entered

105
Eg E150 entered wrongly or

Eg Credit purchasefrom M Maclaren 56

was entered in the boots N 65
The E9 65 56 encerspurchase record
needs to be removed

Oriainae Wrong Error Rectifying

DR Purchased Dr Purchased 65 Dr MMaclaren 9

Cr MMaclaren 56 CR MMaclaren65 Cr Purchases 9
Purchased

MMaclaren 65 ErrorCorrected 9
NetPurchaser 65 9
moldingupsum
Overeating Adding up a sum which gives
a number
greater than it should
be
 egg sum of 100 overcoot N 110
Undercouting
Adding up a sum which gives
number less than it should be

sum 65 undercast N 56
eg of

Suspense Account

Trial Balance
DR CR
sales
Purdine
touet
Liabilities
Expenser
capital
In T
DR CR
Sales 100
Purchase 100
Aunt 500
Liabilities 500
Expense 200
capital 300
 trial not
Balanced
is

Now Trial
is Balanced For F
SuspenseAccount
When trial balance totals are not
equalto
then a suspense account is created
invert the differences between the two
sides trial
of
see above difference 100
Egadded in debit side withof the
name
of suspense account

Examiner Requirements
Prepare Suspense Account
Correcting entries
Revised
for
errors
profit calculation
Impact Effect on
profit Balancesheetitems
DRSideTotal is 800
CRSide Total is 900 DR SuspenseAccount CR
Difference 100
canceloont
pertrial
900 800 Seeother
info
 F rvenled next month that difference
in
100 is actually office expense of 10
ofnot recorded
parted in expense account

Original ERROR
Rectifying
a Officeexpense 100
Cr BANK 100
Suspense
iipitttl
badoo.FI
Dr SuspenseAc
Debit surpenait
Difference
per trial 100 Office 100
Expense

PastPAPER 1 IT
Nov 2021
022K
F meanssuptet

Emissary
Dait DrSuspense 400
DrKapists

T.int 120