JShow how each of the following errors would affect trial balance agreement: (i) Computer repairs TZS 184,000 was debited to the computer account. (ii) TZS 819,000 discounts received credited to discounts allowed account. (iii) Stock at close undervalued by TZS1,100,000. (iv) TZS 145,000 commission received was debited to the sales account. (v) Drawings TZS 94,000 credited to the capital account. (vi) Cheque paying TZS 317,000 to T Burnett entered in cash book but not in the personal account. (vii) Cheque TZS 212,000 from J Hare credited to J Hare
The correct answer and explanation is:
Here is the detailed explanation of how each of the given errors would affect the trial balance agreement:
Effect of Errors on Trial Balance Agreement
- Computer repairs TZS 184,000 debited to the computer account
- This is an error of principle, meaning the expense was recorded as an asset instead of a repair expense.
- It does not affect the trial balance agreement because both sides (debit and credit) remain equal.
- TZS 819,000 discounts received credited to discounts allowed account
- This is an error of commission, as it affects accounts of the same type.
- Since the amount was credited incorrectly but within the same trial balance section, the trial balance remains unaffected.
- Stock at close undervalued by TZS 1,100,000
- This is an error affecting final accounts, not the trial balance, as closing stock is an adjustment made outside of ledger balances.
- The trial balance remains unaffected.
- TZS 145,000 commission received debited to the sales account
- This is an error of posting, where a revenue item was debited instead of credited.
- The trial balance will show a TZS 290,000 mismatch (TZS 145,000 missing from the credit side and excess on the debit side).
- Drawings TZS 94,000 credited to the capital account
- This is an error of principle, reducing capital instead of drawing from it correctly.
- The trial balance remains unaffected.
- Cheque paying TZS 317,000 to T Burnett entered in cash book but not in the personal account
- This is an error of omission, meaning one side of the transaction was not recorded.
- The trial balance will not agree, with a shortfall of TZS 317,000 on the debit side.
- Cheque TZS 212,000 from J Hare credited to J Hare account
- This is an error of commission, meaning an entry was posted to the wrong account.
- It does not affect the trial balance, as the debit and credit entries still match.
Summary Table: Impact on Trial Balance
| Error Description | Type of Error | Affects Trial Balance? | Mismatch Amount |
|---|---|---|---|
| Computer repairs to asset | Principle | No | N/A |
| Discount received in wrong account | Commission | No | N/A |
| Undervalued closing stock | Adjustment | No | N/A |
| Commission received debited to sales | Posting | Yes | TZS 290,000 |
| Drawings credited to capital | Principle | No | N/A |
| Cheque to T Burnett not in ledger | Omission | Yes | TZS 317,000 |
| Cheque from J Hare wrongly credited | Commission | No | N/A |
Conclusion
Errors of principle and commission often do not affect the trial balance because both debit and credit entries remain equal. However, errors of omission and incorrect postings result in an imbalance, requiring adjustments to restore agreement.
Now, I will generate an image summarizing these effects visually.
I’ve generated an accounting infographic that visually summarizes the effects of different errors on the trial balance. Let me know if you need any modifications or further clarifications!
