VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.

1. 7.9
SITUATION #6:
CORRECTING ERRORS
IN THE ACCOUNTS

2. © Michael Allison. Author’s permission required for external use.
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS
 The General Journal is also used to correct errors made when entering
transactions. For example:
 A payment of $80 for advertising was incorrectly debited to insurance
Advertising [E]
80
Bank [A]
80
Insurance [E]
31/1 Advertising 80
Advertising [E]
31/1 Bank 80
Bank [A]
80
Insurance [E]
80 31/1 Advertising 80

3. © Michael Allison. Author’s permission required for external use.
Advertising [E]
80
Bank [A]
80
Insurance [E]
31/1 Advertising 80
Advertising [E]
31/1 Bank 80
Bank [A]
80
Insurance [E]
80 31/1 Advertising 80
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Advertising [E] 80
Insurance [E] 80
Correction of error (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Advertising [E] 80
Insurance [E] 80
Correction of error (Memo 1)
Advertising [E]
80
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Advertising [E] 80
Insurance [E] 80
Correction of error (Memo 1)
Insurance [E]
80 80
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Advertising [E] 80
Insurance [E] 80
Correction of error (Memo 1)
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS

4. © Michael Allison. Author’s permission required for external use.
 The General Journal is also used to correct errors made when entering
transactions. For example:
 An invoice of $40 for a credit sale was charged to B. Andrews but should
have been charged to B. Anderson
Debtor – B. Anderson [A]
40
Debtor – B. Andrews [A]
40
Debtor – B. Anderson [A]
31/1 Bank 80
Debtor – B. Andrews [A]
40 80
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS

5. © Michael Allison. Author’s permission required for external use.
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Debtor – B. Anderson [A] 40
Debtor – B. Andrews 40
Correction of error (Memo 1)
Debtor – B. Anderson [A]
40
Debtor – B. Andrews [A]
40
Debtor – B. Anderson [A]
31/1 Bank 80
Debtor – B. Andrews [A]
40 80
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Debtor – B. Anderson [A] 40
Debtor – B. Andrews 40
Correction of error (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Debtor – B. Anderson [A] 40
Debtor – B. Andrews [A] 40
Correction of error (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Debtor – B. Anderson [A] 40
Debtor – B. Andrews [A] 40
Correction of error (Memo 1)
Debtor – B. Anderson [A]
40
Debtor – B. Andrews [A]
40 40
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS

6. © Michael Allison. Author’s permission required for external use.
 The General Journal is also used to correct errors made when entering
transactions. For example:
 A payment of $123 for petrol was recorded in the Cash Payments Journal as
$132
Petrol [E]
123
Bank [A]
123
Petrol [E]
132
Bank [A]
40 132
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS

7. © Michael Allison. Author’s permission required for external use.
7.9 SITUATION #6:
CORRECTING ERRORS IN THE ACCOUNTS
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Debtor – B. Anderson [A] 40
Debtor – B. Andrews 40
Correction of error (Memo 1)
Petrol [E]
123
Bank [A]
123
Petrol [E]
132
Bank [A]
40 132
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Bank [A] 9
Petrol [E] 9
Correction of error (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Bank [A] 9
Petrol [E] 9
Correction of error (Memo 1)
General Journal
Date Details
General Ledger Subsidiary Ledger
Debit Credit Debit Credit
31 Jan Bank [A] 9
Petrol [E] 9
Correction of error (Memo 1)
Bank [A]
9 132
Petrol [E]
132 9

8. © Michael Allison. Author’s permission required for external use.
TASK
In-class Homework
Ex7.15 X
Ex7.16 X
Ex7.17 X