Question 2
Identify the errors in the following transactions and state if they would affect the agreement of the trial balance totals:
- Purchase of consumables posted to purchases account:
- An invoice amount incorrectly posted to purchases day book.
- Returns outwards posted to the personal account only.
- The total sales of N 120,000 was recorded as N 102,000.
- Payment of cheque to Ige entered on the receipt side of the cash book and credited to Ige’s account.
Observation
There were two demands to the question; first is to identify the error and secondly to state whether the error identified would affect the trial balance totals. Candidates’ response in this question showed lack of understanding for the rudiments of this questions.
The responses expected from the candidates are:
2(a) Error of principle: It will not affect the agreement of the trial balance totals.
2(b) Error of original entry: It will not affect the agreement of the trial balance totals.
2(c) Error of single entry or partial omission: It will affect the agreement of the trial balance totals.
2(d) Undercasting error: It will affect the agreement of the trial balance totals.
2(e) Error of complete reversal: It will not affect the agreement of the trial balance totals.