7.9 Situation 6 - Correcting errors in the accounts
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VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.
![© 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](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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7.9 Situation 6 - Correcting errors in the accounts
- 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