Cambrige Notes: Principles of Accounting: Correcting errors example

• We have looked at entries required to correct various errors
• Now consider the following example

The following errors were discovered in the books of K Musana on 31 March 20×7

1. Purchases $1,410 on credit from A Rombe had been entered in B Rombe’s account
2. A cheque of $94 paid for printing had been entered in the cash column of the cash book instead of in the bank column
3. Sale of goods $734 on credit to D Roko’s had been entered in error in D Ruoko’s account
4. Purchase of goods on credit L Havo $819 entered in the correct accounts in error as $891
5. Cash paid to G Bhande $64 entered on the debit side of the cash book and the credit side of G Bhande’s account
6. A sale of fittings for $320 had been entered in the Sales account
7. Cash withdrawn from bank $200 had been entered in the cash column on the credit side of the cash book, and in the bank column on the debit side
8. Purchase of goods $1,182 has been entered in error in the Furnishing Account

Required:

1. Show the journal entries required to correct these errors, narrations are not required
2. Name each of the errors above

Solution

a)

b)

1. Error of Commission. Both A Rombe and B Rombe are personal accounts found in the Purchases Ledgor
2. Error of Commission. Both Cash and Bank accounts (columns) are in the Cash Book and are current assets i.e. of the same class.
3. Error of Commission. Both D Roko and D Ruoko’s Accounts are found in the Debtor’s Ledger and are personal accounts
4.  Transposition error or it could be an error made in the original entry it is not clear which it is in this instance
5. Complete reversal of entries
6. Error of principle
7. Complete reversal of entries
8. Error of principle

NB

• We have looked at a more challenging example which includes Disposal which is dealt with here

To access more topics go to the Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes.