Correction of error and journal entry
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Hiya,
I am wondering if someone can clear something up for me.
When learning about journal entries and how you correct an error using the journal, the textbook clearly said:
If a misposting error has occurred, for example, in the heat and light account a debit of £1,000 has been made, and it should have been for £900.
If you were to corret this, the textbook blatently said that you should not adjust the £100 difference, but should reverse the £1,000 entry and re-enter the correct amount of £900 (makes sense). It said that you shouldn't use the £100 differencial in your journal entry as there was never an amount entered of £100 (fair enough).
If you were to do it the long way, or textbook way in the exam (ie: reverse wrong amount and post correct amount), instead of just posting the differencial amount, would you get penalised for this? Surely not as the outcome is the same when drawing up a T account and balancing it?
Please help, I don't want to answer the question the wrong way in the exam - even if I do get the same outcome! :?
Hope this makes sense folks.
Bex
I am wondering if someone can clear something up for me.
When learning about journal entries and how you correct an error using the journal, the textbook clearly said:
If a misposting error has occurred, for example, in the heat and light account a debit of £1,000 has been made, and it should have been for £900.
If you were to corret this, the textbook blatently said that you should not adjust the £100 difference, but should reverse the £1,000 entry and re-enter the correct amount of £900 (makes sense). It said that you shouldn't use the £100 differencial in your journal entry as there was never an amount entered of £100 (fair enough).
If you were to do it the long way, or textbook way in the exam (ie: reverse wrong amount and post correct amount), instead of just posting the differencial amount, would you get penalised for this? Surely not as the outcome is the same when drawing up a T account and balancing it?
Please help, I don't want to answer the question the wrong way in the exam - even if I do get the same outcome! :?
Hope this makes sense folks.
Bex
0
Comments
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Re:Correction of error and journal entry
Hi Rebecca, personally I would reverse the error out completely and then add the correct entry. From past experience, when going through budgets (accounts) at the year end, it's easier to check for errors etc if there are not any 'funny little journals' clouding the issue. I don't think you would lose marks by doing it this way, you would be showing the examiner your understanding of the error and your use of journals.
Good luck in the exam.
Jackie0 -
Re:Correction of error and journal entry
This has confused me :? our tutor has taught us to just alter the difference. And in the practice exams I've done it looks like the difference is altered - the transaction isn't reversed completely.
So we should reverse the entry and enter the correct one?
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Re:Correction of error and journal entry
I don't think you will lose marks by doing it the long way, but if you feel more comfortable adjusting the difference then do so, just make sure that your journal entry notes are quite clear that you are making an adjustment for the difference.
Jackie0 -
Re:Correction of error and journal entry
Hiya Gem,
I hope that Jackie's response above and below has helped you out also.
Either way you should get the same outcome, I just wanted to answer it in the way that the markers want it answered, you know? :?
As long as we show all of our working like Jackie advised, we should be cool either way.
Good Luck in June
Bex 0 -
Re:Correction of error and journal entry
Hiya Jackie,
Thank you for posting a reply and advising me of the way that you do it.
Like you said, I would rather reverse the error and post the correct answer, this would be easier, I would have thought, for a newcomer at work, or audit, for example, to trail through the journal entries and see why and how you reversed the error in the first place.
Thanks ever so much though chick
Bex
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