Error of Original Entry (Cambridge International IGCSE Accounting)
Error of original entry
What is an error of original entry?
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An error of original entry occurs when a transaction is entered into both of the ledger accounts using an incorrect amount
- The same incorrect amount is entered into both the debit account and the credit account
- It is possible that the amount of the transaction was entered incorrectly into the books of prime entry
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The incorrect amount is included in the total for the debits and the total for the credits
- The totals will therefore balance
How do I correct an error of original entry?
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Find the difference between the incorrect amount and the correct amount
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Enter the difference into both accounts
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To increase an amount
- Put the difference on the same side as the original entry
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To decrease an amount
- Put the difference on the opposite side to the original entry
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Worked Example On 1 March 2024, Ashika identified an error where the sale of goods worth $200 to Kiha was entered into the sales journal as $250. Kiha’s account was debited $250, and the sales account was credited $250.
Prepare journal entries to correct the error. A narrative is required.
Answer:
The accounts currently look like:
- Debit Kiha $250
- Credit sales $250
The accounts should look like:
- Debit Kiha $200
- Credit sales $200
Fix the errors
The amount entered was $50 more than the correct amount
Decrease both accounts by $50
- To decrease the accounts, enter $50 on the opposite sides compared to the original entries
Final answer: Journal
Final answer: Date Final answer: Details Final answer: Debit
Final answer: $**Final answer: Credit
Final answer: $Final answer: 2024
Final answer: Mar 1Final answer: Sales Final answer: 50 Kiha Final answer: 50 Final answer:** Correction of error of original entry - credit sale recorded as $250 instead of $200**
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