A Level Accounting Frequently Asked Questions – By Philip Greening-Jackson
If you are a student studying for your A Level in Accounting you may have found yourself querying certain aspects of the syllabus and terms used. One frequently asked question has been answered by our Academic Expert Philip Greening-Jackson for all you budding Accountants out there.
Errors Having no Effect on the Trial Balance
There are 6 types of error which do not prevent the trial balance from balancing. These can be remembered by the mnemonic CROPOC.
Commission. The entries have been passed to the correct type of account, but the wrong actual account. A sales invoice posted to J Jones, which should have gone to Jones brothers limited.
Reversal. You pass the correct entries, but you Dr the account which you should Cr and vice versa.
Original entry. You enter the wrong figure. Post 1,200 as 12,000, but do it on both sides and you will still balance.
Principle. The entry is in completely the wrong type of account. For example, you enter a motor vehicle in motor vehicle expenses rather than as a fixed asset. These are particularly serious as the final accounts will also be wrong.
Omission. You simply miss out both sides of an entry.
Contra. This is two, or more, entries the net effect of which is to cancel each other out. This is why accountants sometimes spend time looking for a very small error. They cannot be sure that it is, in fact, only one small error.