Question

Classify the following errors under the three categories - Errors of omission, Errors of Commission and Errors of Principle. (RTP Nov 2018) (1) Sale of furniture credited to Sales Account. (ii) Purchase worth 4,500 from M not recored in subsidiary books. (ii) Credit sale wrongly passed through the Purchase Book. (iv) Machinery sold on credit to Mohan recorded in Journal Proper but omitted to be posted. (v) Goods worth 5,000 purchased on credit from Ram recorded in the Purchase Book as 500.​

Answer 1

Answer:

1) Sale of furniture credited to Sales Account: Error of Principle

2) Purchase worth $4500 from M not recorded in subsidiary account: Error of Omission

3) Credit sale wrongly passed through the Purchase Book: Error of Commission

4) Machinery sold on credit to Mohan recorded in Journal Proper but omitted to be posted: Error of Omission

5) Goods worth $5000 purchased on credit from Ram recorded in the Purchase Book as $500: Error of Commission

Explanation:

*Errors of Omission: An error of omission happens when you forget to enter a transaction in the books.

 

*Errors of Commission: Is an error that occurs when a bookkeeper or accountant records a debit or credit to the correct account but to the wrong subsidiary account or ledger.

*Errors of Principle: value recorded is correct but the entries are made in the wrong accounts.

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Answer 2

Answer:

Purchase worth 4,500 from M not recored in subsidiary books.