Assume a company has the significant classes of transactions listed below.

1. Credit sales transactions 2. Raw materials purchase transactions 3. Payroll transactions 4. Equipment acquisition transactions 5. Cash receipt transactions 6. Leasing transactions 7. Dividend transactions 8. Short-term investment transactions

Requirement:

Given the different descriptive types of errors in auditing -------- Clerical Errors: Errors of Principle: Compensating Errors: Error of Omission: Error of Commission: Error of Duplication: Error of Original Entry: Error of Reversal: Error of Transposition:

Identify an error that could occur for each of the eight (8) items enumerated above and name the accounts that would be affected if proper controls were not specified or followed satisfactorily.

Use the following solution format:

TransactionExampleonly:5.CashReceiptsAnerrorthatCouldOccur(Identifytheerror)Clericalerror-thetransactionisrecordedtwiceAccountsthatCouldbeAffected(ProvidetheAccountName)Cash,Sales,OtherIncome,CapitalAsset,Gain/Loss 1. 2