TOPIC : TRIAL BALANCE AND ERRORS

SUBTOPIC: ERRORS NOT AFFECTING THE TRIAL BALANCE

OBJECTIVES: By the end of the unit, learners should be able to:

• state the errors that do not affect the trial balance

• explain how the errors affect accounting information

Error of omission

If the book keeper completely leaves out a transaction from the books of accounts, that is an
error of omission. If we sell goods worth $200 to Cathy but do not enter the transaction in
Cathy’s account and the Sales account, the trial balance will still balance.

Error of commission

This error involves posting a correct amount to the wrong person /account. For example, if we
sell goods worth $200 on credit to Cathy but enter the transaction in Catty’s account.

Error of principle

This is where the transaction is recorded in the wrong class of account, for example motor repair
account instead of motor vehicle account.

Compensating errors

This is where errors cancel out, for example Sales are miscalculated and increase by $100 and
Purchases are also increased by $100 in error. Both the debit side and the credit side will have an
extra $100 hence cancelling out.

Error of original entry

If the original figure has an error and the error is carried to both the debit side and the credit side.
For example, we record sales for $130 as $180. The $180 is then correctly treated in the books,
that is debit the customer and credit the sales account with $180.

Complete reversal of entries

This is where the correct accounts to be debited and credited are used, but the entries are on the
wrong sides. For example, a purchase of a van on credit from AMTEC motors. We then credit
the motor van account and debit AMTEC motors. This is a complete reversal of entries.

Transposition errors
This is when the correct digits in an amount, for example $1532 are copied in the wrong order
for recording purposes. In our case, $1532 can be copied as $1352 or $1523.

Questions

1. List the errors that do not affect the trial balance. [6]
2. Explain the error of original entry. [3]
3. If the bookkeeper wants to enter information in the account of a debtor, P Smith and
instead enters in the account of D Smith it is an error of____________ [2]
4. Which error results from a miscalculation on the credit side which increases the credit
side by $1000 and an error in posting on the debit side which also leads to an increase of
$1 000. [2]
5. In writing the credit sales figure, Mercy mistakenly moved the figures around. Instead of
writing $3 899, she wrote $8 399. What type of error is this? [2]

Basil Shumbanhete
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