AC120 lecture 36 Errors in books of account Correction of errors Use of suspense accounts Source: Thomas, chapter 18

Errors The trial balance assists in checking the accuracy of the ledger BUT There may still be errors in the ledger that do not cause the trial balance to disagree (refer to lecture notes on the trial balance) If and when the errors are discovered, correcting entries are reflected firstly as journal entries and then in the general ledger

Examples of errors Plant acquired at cost of €5,000 credited to the cash book but debited to the purchases account in error Purchase invoice received from A. Creditor for €1,000 has been entered in the purchases account as €100 Wages paid €40 not posted to the wages account and the purchases account overcast by €40 Rent received of €400 entered in both the cash book and the ledger as rent paid Writing narratives - informative but concise - refer to Thomas, page 204