Answer Posted / kruthika

A trial balance only checks the sum of debits against the
sum of credits. That is why it does not guarantee that
there are no errors. The following are the main classes of
error that are not detected by the trial balance:
• An error of original entry is when both sides of a
transaction include the wrong amount.[1] For example, if a
purchase invoice for £21 is entered as £12, this will
result in an incorrect debit entry (to purchases), and an
incorrect credit entry (to the relevant creditor account),
both for £9 less, so the total of both columns will be £9
less, and will thus balance.
• An error of omission is when a transaction is
completely omitted from the accounting records.[1] As the
debits and credits for the transaction would balance,
omitting it would still leave the totals balanced. A
variation of this error is omitting one of the ledger
account totals from the trial balance.[2]
• An error of reversal is when entries are made to
the correct amount, but with debits instead of credits, and
vice versa.[1] For example, if a cash sale for £100 is
debited to the Sales account, and credited to the Cash
account. Such an error will not affect the totals.
• An error of commission is when the entries are made
at the correct amount, and the appropriate side (debit or
credit), but one or more entries are made to the wrong
account of the correct type.[1] For example, if fuel costs
are incorrectly debited to the postage account (both
expense accounts). This will not affect the totals.
• An error of principle is when the entries are made
to the correct amount, and the appropriate side (debit or
credit), as with an error of commission, but the wrong type
of account is used.[1] For example, if fuel costs (an
expense account), are debited to stock (an asset account).
This will not affect the totals.
• Compensating errors are multiple unrelated errors
that would individually lead to an imbalance, but together
cancel each other out.[1]

What is written off?

2121

---

what are the customization u have done in sap mm

2293

---

From the following information you are to prepare a Cash Budget for the period from July to December 2008. (i) The estimated sales and expenses are as follows: June July Aug. Sep. Oct. Nov. Dec. Sales 35,000 40,000 40,000 50,000 50,000 60,000 65,000 Purchases 14,000 16,000 17,000 20,000 20,000 25,000 28,000 Wages & Salaries 12,000 14,000 14,000 18,000 18,000 20,000 22,000 Expenses 5,000 6,000 6,000 6,000 7,000 7,000 7,000 Interest Received 2,000 - - 2,000 - - 2,000 Sale of Fixed Assets - - 20,000 - - - - (ii) Sales are 20% in cash and balance on credit. 50% of the debtors are collected in the month of sales and the remaining in the next month. (iii) The time lag in payment of purchases and expenses is 1 month. However, wages and salaries are paid fortnightly with a time lag of 15 days. (iv) The company maintains a minimum cash balance of Rs. 5,000. The cash balance in excess of Rs. 7,000 is invested in government securities in multiples of Rs. 1,000. Short falls in cash balance are made good by borrowing from banks. The interest received as well as paid is to be ignored.

3032

---

why gross profit transfering to profit & loss account

4303

---

what is dieerence between capital cpapital structure

2396

---

euro currency market

1966

---

commisiion recieved journal entry and receipt required

1480

---

what are the uniform public construction cost accounting act procedures?

1974

---

how to calculate stt

2749

---

what do you mean indirect expanse in trading business?

2288

---

interest paid comes under which head

1489

---

in a every intervew asking one common question why you are living current employer, which is the best answer

3035

---

when calculating for np% do i include interest or do i take it off

2451

---

For how long should prepayments be carried in the books as fictitious asset and when is it ideal for a new coy to pay tax

2104

---

How can retify the errors in the trial balance

2270

---