Chapter 11

Control Systems:
Errors and Suspense

Errors that have no effect on

the
trial balance totals include:
Errors of omission
Compensating errors
Errors of commission
Errors of complete reversal
Errors of principle
Errors of original entry
Transposition errors

A Brief Description
of Each Error
Errors of omission
Absolutely no entry was made in the
ledger.
Compensating errors
Errors that cancel each other.
Errors of commission
Entries are made on the correct sides
but in the wrong personal accounts.

A Brief Description
of Each Error
Errors of complete reversal
Entries made in the correct accounts
but each item is recorded on the
incorrect side.
Errors of principle
Correct amounts recorded in the
wrong class of accounts.

A Brief Description
of Each Error
Errors of original entry
The incorrect amount was recorded
on the correct sides of each
account.
Transposition errors
The digits for the transaction
amounts are rearranged.

Errors that have no effect on

the
trial balance totals include:

Worked Example

Show the journal entries to correct the

following errors. Make all adjustments on
31 Dec. 2009
(a) The purchase of a van on credit from Van
Plus Ltd. for $143 900 had been
completely omitted from the records.
(b) The sales journal and the purchases
journal were each over-added by $2 200.

Errors that have no effect on

the
trial balance totals include:

Worked Example
(c) A credit purchase of goods from R.
Francis for $500 was entered in B.
Francis account.
(d)An electricity payment by cheque
$75 was entered on the receipts side
of the bank account and the wrong
side of the electricity account.

Errors that have no effect on

the
trial balance totals include:

Worked Example
(e) Rental income of $7520 had been
entered in the sales account.
(f) A sale of goods for $900 to S. Angel
was entered in the ledgers, both on the
credit and debit sides, as $600.
(g) A cheque payment to J. Mark for
$9731 was entered in the accounts as
$1397.

Errors that have no effect on

the
trial balance totals include:

Solution to Worked Example

Errors that have no effect on

the trial balance totals
Solution to Worked Example

Errors that have no effect on

the trial balance totals
Solution to Worked Example

Errors that have no effect on

the
trial balance totals include:

These errors will cause the trial

balance totals to disagree resulting in
one side being larger than the other.
When the trial balance totals do not
agree a suspense account is created
as a temporary means of getting the
totals to be the same. The difference
is normally caused by several errors.
Each error must be corrected with the
aid of a suspense account.