Q3.a) The following transcations took place in Rebecas business during the month of December 2016.

The opening balances on 1/12/2016 in the cashbook were cash-shs40,000 (DR) bank shs2,000 (CR)

2/12/2016 Bought business premises worth shs8,000 and paid by cash

3/12/2016 Deposited shs15,000 cash into the business bank a/c

5/12/2016 Bought goods worth shs5,000 on credit from Beatrice

9/12/2016 Returned goods shs800 to Beatrice as they were faulty

14/12/2016 Received shs10,000 cash as aloan from Isaac

15/12/2016 Made credit sales to Daniel worth shs9,000

16/12/2016 Paid the amount due to Beatrice less 15% cash discount using a cheque

17/12/2016 Made cash sales amounting to shs7,000

18/12/2016 Purchased goods worth shs7,000 from Joseph on credit

19/12/2016 Paid electricity bill shs2,000 using a cheque

20/12/2016 Made credit sales to Robert worth shs6,000

21/12/2016 Returned goods worth shs500 to Robert complaining that they had expired

26/12/2016 Received cash from Daniel, a debtor in respect to the amount due from him less 8%cash discount

27/12/2016 Paid the amount due to Joseph less 3% cash discount using cash

28/12/2016 Received the amount due from Robert less 5% cash discount in form of cheque

31/12/2016 Received a cheque of Shs10,000 in respect to rent income earning

Required:

i)Write a three-column cashbook for the month

ii)Clearly show the posting of discounts to the respective ledger accounts.

b) Explain the following accounting error giving an example in each case:

i)Error of principle

ii)Compensating error

iii)Error of original entry

iv)Error of complete reversal of entries