Q) The trial balance of Kelvin does not balance.
Which TWO of the following errors could explain this, assuming that Kelvin maintains control accounts for its receivables and payables within the double entry system?
(1) The sales day book was undercast by $100.
(2) Discounts received were credited to sales revenue account.
(3) An opening accrual was omitted from the rent account.
(4) The debit side of the cash account was undercast.
A (1) and (2)
B (2) and (3)
C (3) and (4)
D (1) and (4)
C is the right answer.
Hello tutor!!
So I choose option D which mean I thought error of undercasting sales daybook by $100 will result in imbalance of trial balance but I was wrong and I don't know why ?
because undercasting mean you undercast the TOTAL of daybook which will effect the control account and then imbalance the trial balance.
If I'm wrong then why and how the error of miscasting would not effect the trial balance and also tell me how statement 3 will result in imbalancing of trial balance.
Thank you!!
Ask the Tutor ACCA FA
Error and omission
2y ago#11. The sales day book is not part of the double entry. The total is debited to receivables and credited to sales, so although it will be the wrong figure in both accounts, the debit will equal the credit.
3. If the opening accrual is missing then the balance on the account at the end will be wrong and therefore the trial balance will not balance.
Have you watched my free lectures on these?
So error #1 will effect only control acc. ?
And one more thing, what will be imbalance due to the error #1 ?
2y ago#3No. Error 1 affects both the receivables account and the sales account. Given that the same wrong amount is entered in both, there is no imbalance.
Again, have you watched my free lectures on Books of Prime Entry?
But I have seen many questions where the word 'undercast' 'miscast' and 'overcast' is used and they mean that error is occured in the TOTAL which will affect only receivables/payables and not sales/purchases.
2y ago#5It does mean the total is wrong.
However it is the total in the sales day book that is wrong, and the sales day book is not part of the double entry. Do read my previous reply again (and do watch my free lectures on the Books of Prime Entry).
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