The document outlines different categories of accounting errors that do not affect the trial balance, categorized as principle errors, original entry errors, omissions, reversal of entries, commission errors, and compensating errors. Each type is illustrated with examples and correct entries versus incorrect entries. Additionally, it provides a reflection section with multiple transactions for students to identify the type of error present if the trial balance is balanced.

1. UNIT 3 – PART 2
THE TRIAL BALANCE
AND ERRORS

2. LEARNING OUTCOME
 Students able to explain and differentiate correctly
errors that do not affect the trial balance.

3. CATEGORIES OF ERRORS
 If the trial balance balances ( Total debits = Total
credits).
 If the trial balance does not balance (Total debits =
Total credits)

4. ERRORS THAT OCCUR IF THE TRIAL
BALANCE BALANCES (NOT REVEALED BY
TRIAL BALANCE)
P Principle
O Original entry
O Omission
R Reversal of entries
C Commission
C Compensating

5. 1) Errors of Principle
 An entry has been posted the wrong account of a
different category.

6. Example
 Office equipment purchased for $1,000 in cash has
been debited to an office expenses account.
Correct entry:
Wrong entry:
Dr Office Equipment $1000
Cr Cash $1000
Dr Office Expenses $1000
Cr Cash $1000

7. 2) Errors of Original Entry
 The wrong amount is recorded in the books of
accounts compared to the original figure.

8. Example
 A payment of $1,200 to a creditor, W. Rooney, has been
entered as both a debit and credit as $1,000.
Correct entry:
Wrong entry:
Dr W. Rooney $1200
Cr Bank $1200
Dr W. Rooney $1000
Cr Bank $1000

9. 3) Errors of Omission
 A transaction has been completely omitted from the
accounts.

10. Example
 A sale of $400 to John Wayne has been completely
omitted from the accounts.
Correct entry:
Wrong entry:
Dr John Wayne $400
Cr Sales $400
No entry

11. 4) Reversal of Entries
 When recording a transaction, the debit and credit
entries are reversed.

12. Example
 The purchase of goods on credit from M. Loki for $60
was entered on the debit side of M. Loki’s account and
the credit side of the purchases account.
Correct entry:
Wrong entry:
Dr Purchases $60
Cr M Loki $60
Dr M Loki $60
Cr Purchases $60

13. 5) Commission
 An entry has been posted to the wrong account of the
same category.

14. Example
 A purchase of goods from C.Rayne has been posted to
the credit side of C.Ryan’s account in error, amounting
to $500.
Correct entry:
Wrong entry:
Dr Purchases $500
Cr C Rayne $500
Dr Purchases $500
Cr C Ryan $500

15. 6) Compensating Errors
 An error on the debit side is compensated by an error
of equal amount on the credit side.

16. Example
 The purchases account was undercast by $2,200, and
the sales account was also undercast by $2,200. The
correcting entries should be:
Correct entry: Dr Purchases $3200
Cr Air Asia $3200
Dr Pizza Hut $5200
Cr Sales $5200
Wrong entry: Dr Purchases $1000
Cr Air Asia $3200
Dr Pizza Hut $5200
Cr Sales $3000

17. REFLECTION
Identify the type of errors (if the trial balance
balances) for each of these transactions:
1) Rent paid amounting $410 was not recorded in any
books.
2) Credit sales amounting $949 to Super Savers was
wrongly recorded into Super Seavers account.
3) Purchases on credit amounting $300 from Granada
was debited to drawings account .
4) Maintenance expenses amounting $1400 was debited
into the premises account.

18. 5) Mr. Galliano’s personal expenses was debited to the
sundry expenses account.
6) Wages paid was undercast by $66 and commission
received was also undercast by $66.
7) Purchases of stationery amounting $135 was recorded
as $153 in the books of account.
8) Carriage outwards $75 was debited into the motor
vehicles account.
9) Payment of cheque amounting $745 to Maryland was
debited into the Marry Brown account.
10) Payment of cheque amounting $1300 to Bonia was
debited into the bank account and credited into
Bonia’s account.