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Sir one last question to clear all my doubts
If for example
Payables analytical column of cash book has error of totalling..then trial balance will imbalanceBecause the total of cash payment will be rightly posted to cash account..but to PLCA the wrong amount will be posted right?
The trial balance will indeed not balance. The cash account will be correct but the other account will not be correct (and the other account does not have to be the purchase ledger control account).
This question is from a BPP mock paper:
Which of the following types of book-keeping errors is never indicated when a trial balance is extracted:
A. Error of commission
B. Error of omission
C. Error of principle
D. Transposition errors
The correct answer according to the answers section is C but I don’t understand how. Shouldn’t it be A? Please help me out. It’s urgent…An error of commission will normally be when an entry is simply made in the wrong account, in which case the trial balance will still balance. However it can also be (for example) one of the entries entered into an account twice by mistake, in which case the trial balance will not balance.
Ok. So, you mean to say for eg., a sale to customer X incorrectly recorded twice in the sales account? (Dr. Sales Cr.Sales)
If that’s the case then the class of account is different, i.e. the sales is income while receivables are assets. This makes it an error of principle
Correct me if I have understood this wrongly and I request you to give me an example to illustrate your previous explanation
An example is if the debit receivables and credit sales, but make the credit entry twice by mistake. If that happens the the trial balance will not balance.
I understand what you mean but how is that called an error of commission?? I’m really confused. Isn’t it when the correct amount has been posted on the correct class of account but the wrong account? In this case it is in the right account but twice:
Dr Receivables $100
Cr Sales $200 (posted twice by mistake)Can this also be called an error of commission?
As I wrote before, usually it is simply when an entry has been posted to the wrong account. However it can also be the situation you have illustrated in your latest post 🙂
Ohh ok. I did not know it could also be when an entry is posted twice in one of the accounts involved. Thank you
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