1 / 15

Lesson 59

Accounting. Lesson 59. Correction of Errors. By the end of this Lesson. 1. Mark the homework ..Sheet 33 Q’s 2 & 3. You will. 2. Learn how to correct errors (6 types) that do not prevent the trial balance from agreeing. First ..mark your work and hand in.

saul
Download Presentation

Lesson 59

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Accounting Lesson 59 Correction of Errors Paul Copeland

  2. By the end of this Lesson 1. Mark the homework ..Sheet 33 Q’s 2 & 3 You will 2. Learn how to correct errors (6 types) that do not prevent the trial balance from agreeing Paul Copeland

  3. First ..mark your work and hand in Give a tick for each correct entry…add ticks to give total for each question Homework answers given over the next 4 slides Careful marking leads to perfect answers and outstanding exam results ….go for it! Paul Copeland

  4. Correction of Errors…Top Tip Even if you are asked to do the correcting double entry in the General Journal ..always work your answer out in ledger form first! • 3 Stage Method • Show the entries that have been done • Identify the mistake • Correct the mistake with a double entry Together we will work through the H Sagrott question Paul Copeland

  5. Business of K Sagrott…(a) Bank D McDuff 28 D McNab Working …you can abbreviate Bank 28 D McDuff 28 D McDuff D McNab 28 General Journal D McDuff Dr 28 Answer D McNab 28 Being correction of error of commission Paul Copeland

  6. Business of K Sagrott…(b) Bank Office furniture 65 Office Expenses Bank 65 Off furniture 65 Office furniture Office Expenses 65 General Journal Office furniture Dr 65 Office expenses 65 Being correction of error of principle Paul Copeland

  7. Business of H Sagrott…(c) Discount Received Sundries 10 Discount All 10 Discount Allowed Disc Rec 10 General Journal Discount allow Dr 10 Discount received 10 Being correction of error of commission Paul Copeland

  8. Stop off at your Reference Point You will need to know the 6 types of error not affecting the trial balance Failure to do one’s job properly because accounts with similar names were mixed up 1. Error of commission 2. Error of principle Lack of understanding of how to do accounts properly 3. Original error Mistake made in a book of original entry Entire double entry the wrong way round 4. Reversal Two unrelated mistakes that by chance cancel each other 5. Compensating 6. Omission Complete double entry totally missed out Paul Copeland

  9. Question 3 A Smythe General Journal M Ltd Pch 1 600 Purch 1 600 Save time by abbreviating on working accounts Jn 30 Machinery Ltd 1600 Purch Purchases 1600 M Ltd 1 600 M Ltd 1 600 Being correction of error of principle Bank Jn 30 Disc Rec 7-50 D Gor ? D Gorrie 7-50 D Gor ? Being correction of discount disallowed Bank ? D Rec 7-50 Jn 30 Fittings 80 DR 7-50 Machinery 80 Dis Rec D Gor7-50 D Gor 7-50 Being correction of error of commission Dep on M Machinery Fit 80 Ma 80 Fittings Paul Copeland M 80 Dep 80

  10. Now ..do Q4 in your book Even if you are asked to do the correcting double entry in the General Journal ..always work your answer out in ledger form first! • 3 Stage Method • Show the entries that have been done • Identify the mistake • Correct the mistake with a double entry You should be able to do Q4 inside 10 minutes ..without cutting corners! Paul Copeland

  11. Big Picture on Correction of Errors Errors that do prevent the trial balance totals from agreeing Remember the 2 parts Errors that have NO EFFECT on the agreement of the trial balance So We will now move on to Done this one Paul Copeland

  12. If the Trial Balance does not agree Trial Balance of D Beckham at 30 April 2001 Suspense Account Dr Cr Purchases 50 Bal b/d 50 Capital 20 Sales 30 Purchases 80 Crediting Purchases Account with £50 will correct purchases and debiting suspense with £50 will clear the suspense Rent 6 Premises 14 Suspense 50 100 Make the trial balance agree by creating a suspense account So if PDB was too big by £50 this bigger figure would have been posted to Purchases Account In the first few days of May the error was found (Purchases Day Book was overcast by £50) Paul Copeland

  13. Sheet 34 Question 1 ..A Baynes Suspense account General Journal Balance b/d 39 M Lacey 39 M Lacey Dr 39 M Lacey account Suspense 39 Suspense 39 Being correction of failure to post to creditors account Paul Copeland

  14. Homework For next Lesson From worksheet 33 do questions 5 and 6 From worksheet 34 do questions 2 and 3 please, always stick the question into your book Paul Copeland

  15. Summary E X P L A I N T O Y O U R P A R T N E R • Name and explain the 6 types of error that do not prevent the TB from agreeing • What is the purpose of a suspense account • Why are accountants only happy when the suspense account has been cleared? Please complete the lesson evaluation form ..your constructive feedback is greatly valued Paul Copeland

More Related