Class Exercises – Accounting Errors

Question 1

Little Almond Biz recorded its business transactions for the first time and the following
transactions were wrongly recorded:

1. A cash sale amounting to RM1,500 was correctly posted to the cash

account. However, the sales account was credited with RM1,050.
Error that affect TB
Dr Suspense Ac 450
Cr Sales 450
Suspense a/c
1 Sales 450 1 TB 450

Sales a/c
1 Suspense 450

2. A cash purchase of a computer worth RM1,800 was wrongly debited to the

repair and maintenance account.
Error of principle
Dr Computer 1,800
Cr Repair & maintenance account 1,800

3. Paid the advertising expenses amounted to RM500 in cash. The entry was
only made in the cash account but not in the advertising expense account.
Error that affect TB
Dr Advertising expenses 500
Cr Suspense account. 500

Suspense a/c
3 TB 500 3 Advertising expenses 500

Advertising expenses a/c

3 Suspense 500

Required:

i. For each of the above scenarios, identify the type of error made by Little
Almond Biz.

ii. Give the necessary corrections for the above errors either in the general
journal (for errors not affecting the trial balance) or in the general ledger (for
errors affecting the trial balance).
Question 2

On 31 March 2020, AZ Trading had identified the following error in their accounting
records:

1. The capital contribution by the owner amounting to RM50,000 cash was

completely omitted.

Error of Omission
Dr Cash 50,000
Cr Capital 50,000

2. Credit purchases of RM5,000 from CC Enterprise was wrongly recorded

as Debit CC Enterprise; Credit Purchases.
Dr CC ENTERPRISE 5,000
CR PURCHASES. 5,000

Error of Reversal
To cancel the error
Dr Purchases 5000
Cr CC Enterprise 5,000

To make the correct entries

Dr Purchases 5,000
Cr CC Enterprise 5000

OR

Dr Purchases 10,000
Cr CC Ent. 10,000

3. The credit sales made to Faris Enterprise amounting to RM2,500 was

recorded as RM2,050 (both accounts) in the books of prime entry.
Error of Original Entry

Dr AR – Faris Enterprise. 450

Cr Sales 450

Required:

i. Identify the type of error made by AZ Trading in recording the above

transactions.

ii. Journalize the correction of the above errors.

Question 3

Syahiran started a business on 1 April 2020 selling salted terubuk in Kata Samarahan.
He invested RM25,000 cash into the business as starting capital.

The business debited capital account and credited cash account for this transaction.

On 2 April 2020, the business purchased salted terubuk worth RM5,000 from Lee Cold
Storage on credit but recorded under Li Cold Storage.

On 7 April 2020, the business also recorded the purchase of RM1,500 display racks for
business use by cash as purchase of salted terubuk.

Required:

i. Identify the type of errors made by Syahiran in recording the above transactions.
1. Error of reversal
2. Error of Commission
3. Error of Principle

ii. Show the journal entry to correct the above errors. Narration is not required.

1. Dr Cash. 50,000
Cr Capital. 50,000
2. Dr AP - Li Cold Storage 5,000
Cr AP - Lee Cold Storage 5,000
3. Dr Display Rack 1,500
Cr Purchase 1,500

Question 4

Sherry, an account clerk at Akasia Enterprise has been asked to prepare ledger and trial
balance as at 28 February 2020. The trial balance did not balance and upon investigation,
the following errors were discovered:

1. A payment of RM300 for electricity bills by cash had not been recorded at all.

2. A repair to the motor vehicle costing RM700 had been posted to motor
vehicle account.

3. Credit purchases of RM5,000 from Ahmad had been recorded as RM500 in

the books of prime entry.

Required:

i. Identify the type of errors made by Sherry in recording the above

transactions.

1. Error of omission
2. Error of principle
3. Error of original entry

ii. Show the journal entry to correct the above errors. Narration is not required.

1. Dr Electricity expenses 300

Cr Cash. 300
2. Dr Repair of MV 700
Cr MV 700
3. Dr Purchases. 4,500
Cr AP – Ahmad. 4,500
Question 5

En. Salfhi is the owner of Sedeng Trading, a business selling leather goods. He started his
business on 1 October 2018 with RM35,000 cash from his personal loan. He deposited the
cash into the business's bank account and recorded the transactions as follows:

General
Journal
Date Particulars Debit Credit
(RM) (RM)
1 Oct 2018 Bank 35,000
Capital 25,000

On 21 October 2018, Sedeng Trading issued a cheque for the purchase of a display
cabinet from Mida Enterprise that cost RM8,800. En. Salfhi had wrongly recorded the
business transaction as RM18,800 in the general journal

On the same day, he also wrongly recorded a cash payment of RM750 for maintenance
expenses as RM570 in the maintenance expenses account.

Required:

i. Identify the type of errors made by En. Salfhi in recording the above transactions.

1. Error that Affect TB

2. Error of original entry
3. Error that affect TB

ii. Give the necessary corrections to be made for the above errors either in the
general journal (for errors not affecting the trial balance) OR in the general ledger
(for errors affecting the trial balance).

1. Dr Suspense a/c 10,000

Cr Capital 10,000
2. Dr Bank 10,000
Cr Display cabinet 10,000
3. Dr Maintenance expense a/c 180
Cr Suspense a/c 180