Mc0084 Assignment Notebook

Rectification of Errors:

Errors Effecting One Account

These Types pf errors may occur due to the following reasons:

1. Wrong Castings

2. Wrong Balancing

3. Wrong Posting

These errors are not difficult to locate. These are located during the course of preparation of the trial balance. Hence, there is no need to pass any journal entry to rectify these errors. The error is rectified by giving proper explanatory note or by crossing the wrong figure with red ink line and writing the correct figure above the crossed out figures. However, if the error is discovered after finalization of the Trial Balance, a journal entry is passed with the help of a Suspense Account.

1. Error of Casting:

Casting is a process of totaling the amount of transaction at the end of a certain period. It is a mistake in totaling the books of original entry.

Observe the following:

Sales Book

Year

1992
April 5
April 15
April 16
April 24


Amrita
Anita
Hira
Chanda


1,500
2,000
1,400
1,000

4,900

The correct total should be Rs. 5,900.

2. Error of carry forward/brought forward:

This type of error occurs when the total of one page is copied wrongly on the next page. In this case, the same procedure as discussed above should be followed.


3, Error of Posting:

Error of posting may be of two types:

a) Posting to correct account but either with wrong amount or on wrong side or both.

b) Posting to wrong account with correct amount or wrong amount or wrong side with wrong amount.

Type (a) error of posting affects only one account whereas type (b) error affects two accounts. While correcting the mistake at the posting stage, it should be presumed that the transaction has been recorded correctly in the books of original entry.

Errors Effecting two or more Account

Such errors may include:

1. Errors of Omission

2. Errors of Recording

3. Errors of posting to wrong account

4. Errors of principle

1. Errors of Omission

This type of error occurs when the transaction is omitted from being recorded in the books of accounts. The omission affects the 

subsidiary book and the individual account of the item not recorded in the subsidiary books.

E.g.

Purchase of goods Rs. 5,000 from X & Co. is omitted.

In this case, two accounts are affected. Purchase Account as the total of Purchase Book is added short by Rs. 5,000. Personal Account of X & Co. will be affected. Purchase of Rs. 5,000 is not credited to X & Co.’s Account. Hence the rectification entry will be:

Purchase A/c  Dr.                   5,000

            To X & Co.’s A/c         5,000

2. Errors of Recording

The transaction recorded in a wrongful manner affects two accounts as follows:

a) It affects the total of the particular book and the concerned account of that book

b) The individual account is also affected.

E.g.

Goods worth Rs. 450 returned by Ajay recorded as Rs. 45.

In this transaction, Return Inward Book shows an entry of Rs. 45 as against Rs. 450. Similarly, Mr. Ajay’s Account is also affected as it is posted with wrong amount. The rectification entry will be:

Return Inwards A/c     Dr.       405

            To Ajay’s A/c               405

3. Error of principle

This type of error occurs when the principle of accounting is violated. Such an error distorts the profit or loss. At this stage following points should be remembered:

a) when as asset is purchased:

i) It should be debited to Asset Account and not to Purchase Account.

ii) All expenses regarding purchase of an asset and its installation should be debited to the respective Asset Account and not to Expense Account.

iii) Amount spent on repairs of the second hand asset purchased should be debited to the respective Asset Account and not to Repairs Account.


b) When as asset is sold:

i) It should be credited to Asset Account and not to Sales Account

ii) Any expenses incurred in connection with sales should be debited to Asset Account and not to the Expenses Account.

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The Constructive Cost Model (COCOMO) is an algorithmic software cost estimation model developed by Barry Boehm. The model uses a basic regression formula, with parameters that are derived from historical project data and current project characteristics.

COCOMO was first published in 1981 Barry W. Boehm's Book Software engineering economics[1] as a model for estimating effort, cost, and schedule for software projects. It drew on a study of 63 projects at TRW Aerospace where Barry Boehm was Director of Software Research and Technology in 1981. The study examined projects ranging in size from 2,000 to 100,000 lines of code, and programming languages ranging from assembly to PL/I. These projects were based on the waterfall model of software development which was the prevalent software development process in 1981.

References to this model typically call it COCOMO 81. In 1997 COCOMO II was developed and finally published in 2000 in the book Software Cost Estimation with COCOMO II[2]. COCOMO II is the successor of COCOMO 81 and is better suited for estimating modern software development projects. It provides more support for modern software development processes and an updated project database. The need for the new model came as software development technology moved from mainframe and overnight batch processing to desktop development, code reusability and the use of off-the-shelf software components. This article refers to COCOMO 81.

COCOMO consists of a hierarchy of three increasingly detailed and accurate forms. The first level, Basic COCOMO is good for quick, early, rough order of magnitude estimates of software costs, but its accuracy is limited due to its lack of factors to account for difference in project attributes (Cost Drivers). Intermediate COCOMO takes these Cost Drivers into account and Detailed COCOMO additionally accounts for the influence of individual project phases.

The Constructive Cost Model (COCOMO) is an algorithmic software cost estimation model developed by Barry Boehm. The model uses a basic regression formula, with parameters that are derived from historical project data and current project characteristics.

COCOMO was first published in 1981 Barry W. Boehm's Book Software engineering economics[1] as a model for estimating effort, cost, and schedule for software projects. It drew on a study of 63 projects at TRW Aerospace where Barry Boehm was Director of Software Research and Technology in 1981. The study examined projects ranging in size from 2,000 to 100,000 lines of code, and programming languages ranging from assembly to PL/I. These projects were based on the waterfall model of software development which was the prevalent software development process in 1981.

References to this model typically call it COCOMO 81. In 1997 COCOMO II was developed and finally published in 2000 in the book Software Cost Estimation with COCOMO II[2]. COCOMO II is the successor of COCOMO 81 and is better suited for estimating modern software development projects. It provides more support for modern software development processes and an updated project database. The need for the new model came as software development technology moved from mainframe and overnight batch processing to desktop development, code reusability and the use of off-the-shelf software components. This article refers to COCOMO 81.


COCOMO consists of a hierarchy of three increasingly detailed and accurate forms. The first level, Basic COCOMO is good for quick, early, rough order of magnitude estimates of software costs, but its accuracy is limited due to its lack of factors to account for difference in project attributes (Cost Drivers). Intermediate COCOMO takes these Cost Drivers into account and Detailed COCOMO additionally accounts for the influence of individual project phases.Basic COCOMO computes software development effort (and cost) as a function of program size. Program size is expressed in estimated thousands of lines of code (KLOC).

COCOMO applies to three classes of software projects:

    * Organic projects - "small" teams with "good" experience working with "less than rigid" requirements

    * Semi-detached projects - "medium" teams with mixed experience working with a mix of rigid and less than rigid requirements

    * Embedded projects - developed within a set of "tight" constraints (hardware, software, operational, ...)

The basic COCOMO equations take the form

    Effort Applied = ab(KLOC)bb [ man-months ]

    Development Time = cb(Effort Applied)db [months]

    People required = Effort Applied / Development Time [count]

The coefficients ab, bb, cb and db are given in the following table.

Software project    ab    bb   cb    db

Organic   2.4 1.05        2.5 0.38

Semi-detached       3.0 1.12        2.5 0.35

Embedded      3.6 1.20        2.5 0.32

Basic COCOMO is good for quick estimate of software costs. However it does not account for differences in hardware constraints, personnel quality and experience, use of modern tools and techniques, and so on.

Intermediate COCOMO computes software development effort as function of program size and a set of "cost drivers" that include subjective assessment of product, hardware, personnel and project attributes. This extension considers a set of four "cost drivers",each with a number of subsidiary attributes:-

    * Product attributes

           Required software reliability

           Size of application database

           Complexity of the product

    * Hardware attributes

          Run-time performance constraints

          Memory constraints

          Volatility of the virtual machine environment

           Required turnabout time

    * Personnel attributes

           Analyst capability

          Software engineering capability

           Applications experience

           Virtual machine experience

           Programming language experience

    * Project attributes

           Use of software tools

           Application of software engineering methods

           Required development schedule

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