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Give four types of errors not disclosed in a trial balance.

      

Give four types of errors not disclosed in a trial balance.

  

Answers

kinyua
i) ERROR OF COMMISSION
This is an error in which the accountant records a transaction in the correct class of
account, in the correct side but in the wrong name of the account.
For example, a sale of goods on credit to Gatura was recorded by debiting
Gatura?s account.
ii) ERROR OF PRINCIPLE
This is an error committed due to lack of accounting principles. That is, a
transaction is recorded in the wrong class of account, e.g. if a fixed asset such as
motor van is debited to an expense account such as motor vehicle expenses
account.
iii) ERROR OF COMPLETE REVERSAL OF ENTRIES
This is where the correct accounts are used to record a transaction but each item is
shown on the wrong side of the account. For example, suppose we had paid a
cheque to Ondieki for Shs 200, the double entry of which is Cr. Bank Shs 200, Dr.
Ondieki Shs 200, Dr. Bank Shs 200. The trial balance totals will still agree.
iv) COMPENSATING ERRORS
This is an error that occur both on the debit side of an account and on the credit
side of an account and the figures are equal which cancel each other.
E.g Sales account was undercast by Shs 20,000 and Purchase ledger was undercast
with Shs 20,000. The net effect is neutral and the trial balance will still balance.
v) ERROR OF ORIGINAL ENTRY
Where the original figure is incorrect, yet double entry is still observed using this
incorrect figure. An instance of this could be where there were sales of Shs 150
goods but an error is made in calculating the sales invoice. If it were calculated as
Shs 130 and Shs 130 and Shs 130 were credited as sales and debited to the personal
account of the customer, the trial balance would still “balance”.
vi) ERROR OF OMISSION
Where a transaction is completely omitted from the books, the trial balance will still
agree.
vii) TRANSPOSITION ERRORS
Where the wrong sequence of the individual characters within a number was
entered e.g. 142 instead of 124 in both the debit and credit entries, the trial balance
would still agree.

OR

-Errors of omission: result from total omission of transaction from ledger accounts thus there is no
records of the transactions.
-Errors of commission: this is committed in the ledger when one or both entries are posted to the
correct class of account but wrong personal account
-Errors of principle: Result from double entry of transaction made in the wrong class of account.
-Errors of original entry: Made from misreading of figure at the source document.
-Compensation errors: it arises from two errors of the same magnitude on either side of the ledger cancelling each other.
- Errors of complete reverse of entries: this arises from complete reverse of double entry of
transaction in the ledger.
monica20 answered the question on November 1, 2017 at 11:15

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