Correction of Errors - Suspense Accounts (Leaving Cert Accounting): Flashcards
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Practise the cards
10 cards from this deck
What is a suspense account?
What is a suspense account?
Temporary account used when trial balance doesn't balance due to errors
Six error types NOT revealed by trial balance
Six error types NOT revealed by trial balance
- Original entry 2. Omission 3. Commission 4. Principle 5. Compensating 6. Complete reversal
Error of original entry
Error of original entry
Incorrect amount entered consistently on both debit and credit sides
Error of omission
Error of omission
Complete transaction left out of books entirely
Error of commission
Error of commission
Correct amount to correct side but wrong account
Error of principle
Error of principle
Correct amount to correct side but wrong type of account
Compensating error
Compensating error
Two errors cancel each other out
Complete reversal of errors
Complete reversal of errors
Correct amounts to correct accounts but on wrong sides
Capital introduced - journal entry side
Capital introduced - journal entry side
Credit (owner uses personal funds for business expenses)
Drawings - journal entry side
Drawings - journal entry side
Debit (owner uses business funds for personal items)