Finding and Correcting Errors on a Work Sheet

Chapter 6, Section 4

Correcting Errors on Work Sheet

Errors may be discovered for the first time when preparing a work sheet.

The work sheet is a planning document not a permanent record.

Check for TypicalCalculation Errors

When two columns totals are not in balance, find the difference.

If the difference is 1, such as $.01, $.10, $1.00, $10.00, etc. Error is most likely in addition. Add the

columns again.

If the difference can be divided evenly by 2. An amount may have been recorded in

the wrong column.

Check for TypicalCalculation Errors (cont.)

If the difference can be divided evenly by 9. Error may be a transposition or slide

Transposition – switching two numbers

Example: 54 written as 45

Slide – numbers are moved to the right or left

Example: $12.00 recorded as $120.00

If the difference is an omitted amount Look for an amount equal to the difference that may have not

been recorded or extended.

Checking for Errors inWork Sheet

Check for errors in Trial Balance column

All balances copied correctly?

All balances recorded in correct column?

Check for errors in Adjustments column

Debits and credits equal?

Amount of adjustment correct?

Recorded in correct column?

Checking for Errors inWork Sheet

Check for errors in Income Statement and Balance Sheet columns.

Amounts copied correctly when extended?

Account balances extended to correct column?

Net income or loss calculated correctly?

Net income or loss recorded in correct column?

Correcting Errors in General Ledger AccountsEntry posted to the wrong account

1. Draw a line through the entire incorrect entry. Recalculate the account balance and correct the work sheet.

2 Correct entry

1 Incorrect entry

2. Record the posting in the correct account. Recalculate the account balance, and correct the work sheet.

Correcting Errors inGeneral Ledger Accounts

Correcting an incorrect amount Draw a line through incorrect amount; write correct

amount above; recalculate balance.

Correct an amount posted to wrong column Draw a line through incorrect amount; record in

correct column; recalculate balance.

Checking for Errors in General Journal Entries

Debits equal credits for each entry?

Each amount recorded in correct column?

Account Title correct?

All transactions recorded?

Assignments

Work Together 6-4

Using handouts given

Recycling 6-1

Mastery 6-5 (Textbook pg. 173-174)