Chapter 5

The type of transaction depends on which side it goes on. If something is increasing assets or expenses then it goes on the debit side. If it increases liabilities, income or capital accounts then it goes on the credit side.

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  • Created by: Melonball
  • Created on: 20-04-14 16:55

Trial balance - not balanced

If it doesn't balance there may be a problem with the adding or in the double entry books. 

There are 6 errors not shown by the trial balance;

1) Error of omission- transction has been completely missed out.
2) Error of commission/mispost- transaction entered in the wrong person's account.
3)Error of principle- transaction has been entered int he wrong type of account.
4)Error of original entry- £45 posted instead of £54
5)Reversal of entries- the debit and credit postings are the wrong way round.
6)Compensating error- two errors cancel eachother out 

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