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    WHAT DO I DO IF I MADE A CARELESS MISTAKE IN MY MATHS PROBLEM SUM?

    WHAT DOES MY TEACHER DO WHEN HE MARKS A QUESTION WRONGLY?

    WHAT DOES THE CASHIER DO IF SHE GIVES METHE WRONG CHANGE?

    WHAT DOES THE UNCLE AT THE GROCERY SHOP DO WHENHE ADDS UP WRONGLY FOR MY GROCERIES?

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    1. EXPLAIN & CORRECT ERRORS WHICH DO NOT AFFECT

    THE AGREEMENT OF THE TRIAL BALANCE TOTALS.

    2. EXPLAIN AND CORRECT ERRORS WHICH AFFECT

    THE AGREEMENT OF THE TRAIL BALANCE TOTALSBY USING A SUSPENSE ACCOUNT.

    3. RE-CALCULATE PROFITS AFTER ERRORS HAVE BEEN

    CORRECTED.

    4. REVISE THE BALANCE SHEETS TO RECTIFY THE ERRORS.

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    Errors ofomission

    Errors of commission

    Errors of principle

    Errors of original entry

    Compensating errors

    Completereversal of entries

    Errors ofomission of one

    entry

    Errors in calculations

    Errors in amount

    Posting to the wrong side of anaccount

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    When a transaction has been completely omitted from the books.

    By making a double-entry to record the transaction.

    Main

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    An entry has been posted to the wrong account of the same category.

    To reverse the entry in the wrong account and to post the correct entry.

    Main

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    An entry has been posted to the wrong account of a different category.

    To reverse the entry in the wrong account and to post the correct entry.

    Main

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    A wrong amount is recorded in a book of original entry or a document

    such as an invoice and subsequently posted to the ledger accounts.

    To correct the difference in the correct and wrong amount accordingly.

    Main

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    An error on the debit side is compensated by an error of equal amount

    on the credit side.

    To reverse the error on both debit and credit sides of the accounts

    concerned.

    Main

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    When recording a transaction, the debit and credit entries are reversed.

    By making the necessary posting of an amount double the amount of the

    original error.

    Main

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    Forgetting to either debit or credit one side of a transaction.

    By making the necessary posting which has been omitted against an

    entry in the Suspense Account.

    Main

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    Mistakes made in calculation.

    To account for either the overcast or undercast of figures.

    Main

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    The amount debited and the amount credited are different.

    To account for either the overcast or undercast of figures accordingly.

    Main

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    Causing one side of the ledger to be more than the other by twice the

    value of the error.

    To make the necessary adjustments against Suspense Account.

    Main

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    A cash payment of $2,000 for purchases has been omitted

    from the books.

    Purchases Account$

    Cash Account

    $

    Cash 2,000

    Purchases 2,000Main

    Journal entry

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    A sale of $1,000 to Carrefour has been posted to Cold Storage -

    Causeway Point.

    Cold Storage - Causeway Point$ $

    Sales 1,000

    Carrefour

    $

    ERROR MADE

    CORRECTION MADE

    Carrefour 1,000

    Cold Storage - 1,000

    Causeway Point

    Main

    Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    Repairs to vehicles amounting to $3,000 has been posted to

    Vehicles Account.

    Vehicles Account$ $

    Cash 3,000

    Repairs Account

    $

    ERROR MADE

    CORRECTION MADE

    Repairs 3,000

    Vehicles 3,000

    Main

    Journal entry

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    A purchase of $2,100 from Pokka Corporation Limited by

    Carrefour has been entered in the Purchases Journal and posted

    to the ledger as $2,010.

    Purchases Account$

    Pokka Corporation Limited 2,010

    Pokka Corporation Limited

    $

    Purchases 2,010

    ERROR MADE

    CORRECTION MADE

    Pokka Corporation Limited 90

    Purchases 90

    Main

    Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    $ $

    $ $

    ERROR MADE

    CORRECTION MADE

    Wages 10

    Rent received 10

    Main

    Rent received $340 is correctly debited to the Cash Account but

    posted as $350 to Rent Revenue Account. Similarly, wages pai

    a sum of $590, is correctly credited to the Cash Account but

    posted as $600 to Wages Account.Rent Revenue Account

    Wages Account

    Cash 350

    Cash 600Journal entry

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    $ $

    $ $

    ERROR MADE

    CORRECTION MADE

    Carrefour 700

    Cash 700

    Main

    A payment of $700 to a creditor, Carrefour, should be debited

    to Carrefours account and credited to the Cash Account, but

    the entries are reversed.

    Cash Account

    Carrefour

    Carrefour 1,400

    Cash 1,400Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    A cash payment of $2,000 for purchases has been omitted

    from the Purchases Account.

    Purchases$ $

    Cash 2,000

    Suspense Account

    $ $

    Purchases 2,000

    CORRECTION MADE

    Main

    Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    A purchase of $2,100 from Pokka Corporation Limited by

    Carrefour has been entered in the Purchases Journal as $2,010.

    The amount shown on the other account is correct.

    Purchases

    $ $

    Suspense 90

    Suspense Account

    $ $

    Purchases 90

    CORRECTION MADE

    Main

    Journal entry

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    Rates paid $210 was entered correctly in the Cash Book but

    wrongly entered as $120 in the Rates Account.

    Rates Account$ $

    Suspense 90

    Suspense Account

    $ $

    Rates Account 90

    CORRECTION MADE

    Main

    Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    Discount received $100 posted to the debit side of the Discount

    Received Account.

    Suspense Account$ $

    Discount Received 200

    Discount Received Account

    $ $

    Suspense Account 200

    CORRECTION MADE

    Main

    Journal entry

    http://c/My%20Documents/journal%20entries.xlshttp://c/My%20Documents/journal%20entries.xls
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    P.S. The suspense account would be self-balancing when all the errors

    made are detected and corrected, otherwise, it would either have a

    credit or debit balance when closed!

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    Correcting Net Profit Figure Errors made in the accounts

    would affect the figures in our final accounts.

    Errors that affect the Gross Profit and Net Profit figures

    are items that are transferred to the Trading and Profit

    and Loss Accounts ultimately.

    E.g. Sales, Rent, Commission Received etc.

    Errors of items found in the Balance Sheet will not affect

    the profit figure, instead, they will overstate or

    understate the assets and liabilities figures.E.g. Furniture, motor vehicles, loan, bank overdraft etc.

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    Statement of Corrected Net Profit

    $ $

    Net Profit before COE 1,700

    Add Expenses overcast XX

    Revenue undercast XX

    XXXX

    Less Expense undercast XX

    Revenue overcast XX

    XXAdjusted Net Profit XX

    Note: Overcast means showing more than there actually is

    Undercast means showing less than there actually is

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