Answer to Question #249510 in Accounting for OK MOLEFE

Question

Trading stock to the value of R14 000 bought from Tarabo Traders was credited to the account of a debtor, Karango Traders in error. Show the effects and corrections on the DEBTORS CONTROL and CREDITORS CONTROL

REASON FOR ERROR:
T-ACCOUNTS:

EXPLANATION OF T-ACCOUNTS:

Answer 1

Dr Debtors Control A/c R28,000

Cr Creditors Control A/c R28,000

Tarabo Traders

Dr R28,000

Karango Traders

Cr R28,000

The error of principle is the reason for the error occurred where a transaction is that is not recorded in accordance with generally accepted accounting principles ( GAAP).

Tarabo traders will have to debited with double to first cancel the original entry then clear it and record it accordingly as well as Karango Traders account.