Day: March 19, 2020

Which of the following is an error of principle?

Select ONE answer:

1. A sales invoice for an incorrect amount was correctly entered in the sales journal.
2. Stock was issued but an accompanying invoice was not.
3. The wrong percentage rate was used when calculating depreciation.
4. An item was entered in the wrong class of account.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – The incorrect sales invoice will result in the total of the sales journal being incorrect. Therefore, an incorrect figure will be posted to the ledger. So long as this (incorrect) figure is posted to the correct sides of the correct accounts (the debit side of the debtors control account and the credit side of the sales account) this will be an error of original entry.
2. Not correct – This transaction will not be recorded because an invoice was not issued. This will, therefore, be an error of omission.
3. Not correct – Assuming that the double-entry for the (incorrect) depreciation charge is correct, this will be an error of original entry.
4. Correct

 

 

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