Question

Eric is the accountant for a trading firm. While posting entries in the books of accounts, he entered $2,500 into the salary account. However, the total salaries for the firm amount to $3,700. What type of error did Eric make?

Answer 1

Eric committed an ERROR OF ORIGINAL ENTRY.

Error of original entry happens when a wrong amount is inputted into the correct accounts.

In the above scenario, the salary account is the correct account. The error occurred in the amount. It should have been 3,700 instead of 2,500.