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Principles of Accounting · Source documents

Avoiding document date and amount errors

You understand the entry, but a copied amount or date from the document turns it wrong.

Most copying errors come from four slips: digits swapped, a discount ignored, a date misread or a decimal point in the wrong place. Each has a check that takes a few seconds.

This lesson closes the skills in the source documents chapter. It helps most after choosing the appropriate source document.

Which errors should I watch for?

  • Transposed digits, such as RM1 870 copied as RM1 780.
  • A trade discount that was ignored, so the gross amount was recorded.
  • A date copied wrongly, so the transaction lands in the wrong month.
  • A decimal slip, such as RM45.00 copied as RM4.50.

Worked example: one invoice

Invoice 4812 is dated 28 March. It shows 40 units at RM25 each, less 10% trade discount.

  1. Gross amount = 40 × 25 = RM1 000.
  2. Trade discount = 10% × 1 000 = RM100.
  3. Net amount = 1 000 − 100 = RM900.

The entry is dated 28 March and recorded at RM900. The trade discount is not a separate entry, because the invoice already shows the amount after discount.

The divisible-by-nine check

Suppose a trial balance is out by RM90. Because 90 ÷ 9 = 10, the error may be a transposition.

For example, an invoice total of RM1 870 recorded as RM1 780 gives a difference of 1 870 − 1 780 = 90. A difference of RM180 works the same way, since 180 ÷ 9 = 20. The check only suggests a cause, so confirm it against the document.

The mistake that costs marks

One slip is to record the gross amount and to post it in the wrong period. Here the invoice above is recorded at RM1 000 and dated 1 April.

Step Wrong Right
Amount RM1 000 (before discount) RM900
Date 1 April 28 March
Effect March is understated and April overstated Both months correct

The error is hard to notice because the entry still balances. Only a tick against the document finds it.

Check yourself

An invoice dated 14 June shows 25 items at RM48 each, less 15% trade discount. It was recorded as RM1 020 dated 14 July. Check the amount and the date, and state the correct figures.

Answer

Gross = 25 × 48 = RM1 200. Trade discount = 15% × 1 200 = RM180. Net = 1 200 − 180 = RM1 020, so the amount was right.

The error is the date. It should be 14 June, not 14 July, so the entry is in the wrong month.

Only the date is wrong. Check each field separately, because a right amount does not prove the date is right.

What to study next

Test all four skills on the source documents practice set. You can keep a list of slips in the mistake log and paper-error review tool.

If you want a teacher to check how you copy figures, see online one-to-one Accounting tuition.

Common questions

What is a transposition error?

It is swapping two digits when copying, for example writing RM1 780 for RM1 870. The difference between the right and wrong figure is always divisible by 9, which is a quick way to recognise the error from the difference alone.

Which amount do I record from an invoice, the gross or the net?

Record the amount after trade discount, because that is the price actually charged. Trade discount is taken off on the invoice, so it is not a separate entry.

Which date do I use for an entry?

Use the date on the source document unless the question says otherwise. A wrong date can put a transaction in the wrong month or period, which changes the figures of that period.

How can I avoid copying errors under exam pressure?

Say the figure in your head, write it, then read it back against the document. Ticking each copied figure takes a few seconds and catches slips before they spread.

If careless slips keep appearing in otherwise correct answers, a one-to-one Accounting teacher can watch where you copy figures and build a checking routine for you.

  • Online one-to-one lessons for your child with an experienced teacher.
  • Your first class is a one-hour trial, from RM50. The fee is agreed before you book.
  • Happy with the teacher? Continue with lessons of about 1.5 hours. If not, ask for another teacher.