Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Errors Affecting trial balance
- This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.
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- February 13, 2017 at 11:06 am #372213
List the accounting errors and indicate as to whether it affects the trial balance is not.
February 13, 2017 at 4:21 pm #372268I think you should use the word ‘Please’.
Errors not found by trial balance can be categorised as:
• Errors of commission
Example: an expense of rent was incorrectly debited to the wages account.
Example: the purchases day book had been added up to be $8,900 when the
correct total was $9,800. Both purchases and the payables control account would
then have $900 (ie $9,800 – £8,900) too little posted to them, but the double entry
would have been maintained.• Errors of omission
Example: an invoice from a supplier is not entered into the purchases day book at
all, so no entry is made for that transaction.• Compensating errors
Example: rent paid of $210 is debited to the rent account as £120 (error = $90 too
little debited) and cash sales of $540 are credited to the sales account as $450
(error = $90 too little credited).• Errors of principle
Example: the expense of rent of £350 was incorrectly posted to a receivables
account. This error is worse than the error of commission above because it will
affect the profit of the business. Instead of adding to an expense, the value of an
asset has increased.If the trial balance does not balance, the error will have to be ‘one-sided’ eg Cr Cash 321, Dr Supplier 231. Also, missing an account out of the trial balance will cause it no to balance.
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