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8 Cards in this Set

  • Front
  • Back
Error of Ommission
If a transaction is completely ommitted from te books there will be niether a debit entry nor a credit entry, so the trial balance will balance. For example cash sale not entered in the book.
Error of Commission
This occurs when a transaction is entered using the correct amount, on the correct side, but in the wrong account of the same calss. For example cash sale on credit to A Khan correctly credited to the sale account, but debited to M Khan account instead.
Error of Principle
This occurs when a transaction is entered using the correct amount and on the correct side, but in the wrong class of account. For example cash paid for machinery repairs correctly credited to the cash account, but debited to the machinery a/c instead of machinery repairs a/c
Compensating Errors
These occur where two, or more, errors cancel each other out. for example if the sales a/c is added up $100 too much and the purchases a/c is also added over by the same amount, there is an extra $100 on the debit and credit so the trial balance will balance
Error of Orginal Entry
Thios occurs where an incorrect figure is used when the transaction is first entered in the accounts. The double entry will be made using this incorrect amount in both a/c. For example, uf the total if an invoice is $1010 but is incorrectly entered as $1100 the trial balance will balance
Complete Reversale of A/Cs
This occurs where the correct amounts have been entered in the correct accounts, but the entry has been made on the wrong side of each account, For example cash purchases debited in the cash a/c and credited in the purchases a/c. This is a reversal of the correct entry, but the trail balance will balance
Trail Balance - Debit
Assets eg. cash, stock, premises, debtors, etc.
Expenses eg. rent insurance wages, etc.
Purchases/Sales Returns
Trail Balance - Credit
Liabilties eg. loans, creditiors, bank overdraft, etc.
Income eg. (anything received) rent recieved, etc.
Sales/Purchase Returns