Correction of errors

Question 1

Errors of Omission

Answer 1

If a transaction is completely missed out, then the Trial Balance will still balance but it will balance at the wrong amount

Question 2

Errors of Commission

Answer 2

If a debit or credit entry has been correctly posted to the correct side but to the wrong account then the Trial Balance will still agree but will be incorrect.

Question 3

Compensating Errors

Answer 3

If one account has been overadded by £20 and another account has been underadded by £20, then one mistake compensates another and the Trial Balance totals match, but 2 accounts will be incorrect

Question 4

Errors of principle

Answer 4

When an item is entered in the wrong class of account eg if the purchase of an asset is debited to Motor Expenses instead of Motor Vehicles

Question 5

Errors of Original Entry

Answer 5

If the original entry is incorrectly entered eg £24 instead of £42, then the error will not result in the Trial Balance failing to agree