Correcting Errors in the General Journal
As the journal is the basis for the accounting process to follow, an accountant should be very careful in journalizing transactions. If an error occurs in the journal, it will affect the subsequent accounting process, and must be corrected as soon as possible.
If an incorrect account name is given for particular account, the accountant should strike through the name and write the correct name above it. This type of correction should only be done when the journal entry is not yet posted to the Ledger Account.
Consider the following example:
Check No.105 for $200 is written for electricity charges.
Instead of debiting the Electricity Expense account, the accountant incorrectly debited the Rent Expense account. In addition, the amount of $200 was misentered as $300.
The following image illustrates how the transaction can be rectified:
Date |
Account Title |
Debit |
Credit |
Jan 5 |
Electricity Expenses |
$500 |
|
|
Bank Account |
|
$200 |
|
Check No. 105 |
|
|
Remember: the accountant should not erase the incorrect account name or amount, as it might be perceived as an attempt to conceal a mistake or change the account illegally.