Correction of Errors Using Journal Entries (Cambridge (CIE) AS Accounting): Revision Note
Exam code: 9706
Correction of errors using journal entries
How do I correct accounting errors?
STEP 1
Identity how the accounts currently look with the errorsSTEP 2
Identify how the accounts should look if the transactions were entered correctly
STEP 3
Make the necessary entries to fix the errors
Examiner Tips and Tricks
If you are not given the actual figures, then you can make them up to help you spot how to correct them. For example, if the sales account is overcast by $20, then pretend it should be $100 which means it currently has a balance of $120.
How do I correct errors using journal entries?
You can correct errors by making the appropriate entries into the ledger accounts
The journal will be used as the book of prime entry
Enter the account that needs to be debited
It is conventional for debit entries to appear first
Enter the account that needs to be credited
It is conventional to indent the details for credit entries
Give a narrative for the journal entry
State “Correction of error”
Give a brief description of the error
Examiner Tips and Tricks
Narratives are not always required. The exam question will make it clear whether they are needed.
Worked Example
Constance is a trader. On 1 December 2025, Constance identified an error in her accounts. She had sold $100 goods on credit to Jamie but make the entries on the wrong side of both accounts.
Prepare journal entries to fix the error. Narratives are required.
Answer:
$200 needs to be entered on the correct side of both accounts
$100 to undo the error
$100 to enter the correct transaction
Make the journal entries
Journal
Details | Debit | Credit |
Jamie | 200 | |
Sales | 200 | |
Correction of error of putting the values on the wrong side of the accounts | ||
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