1. Finding and Correcting Errors on a Work Sheet Chapter 6, Section 4

2. 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.

3. Check for Typical Calculation 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.

4. Check for Typical Calculation 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.

5. Checking for Errors in Work 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?

6. Checking for Errors in Work 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?

7. Correcting Errors in General Ledger Accounts Entry 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.

8. Correcting Errors in General 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.

9. 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?

10. Assignments  Work Together 6-4  Using handouts given  Recycling 6-1  Mastery 6-5 (Textbook pg. 173-174)