Meaning of Error :
"Errors means mistake made by an accountant or clerk while recording business transactions in the books of accounts" Errors may be the result of incorrect accounting knowledge or wrong Data Collection or wrong recording of the transaction into the books of accounts or due to arithmetical calculations Thus an unintentional omission or commission of amounts and accounts while recording the transaction is known as an error.
Types of Errors
There are four types of errors
1) Errors of principle
2) Errors of omission
3) Errors of commission
4) Compensating errors
Rectification of error:
Errors whether affecting trial balance or not to be located and corrected. The procedure followed to correct the errors and set it right the books of accounts is called rectification of errors.
Types of errors on the basis of Rectification
There are two types of Errors on the basis of Rectification
a) One-Sided Errors (Errors affecting one account)
b) Two-Sided Errors ( Errors affecting two or more accounts)
a) One-Sided Errors:
Wrong casting, wrong balancing and carrying forward, wrong posting, Partial omission, Wrong side of an account, wrong amount on one side.
b) Two-Sided Errors:
Compensating errors, errors of principle, posting to wrong account, recording wrong amount in original book, Errors of complete omission.
"Errors means mistake made by an accountant or clerk while recording business transactions in the books of accounts" Errors may be the result of incorrect accounting knowledge or wrong Data Collection or wrong recording of the transaction into the books of accounts or due to arithmetical calculations Thus an unintentional omission or commission of amounts and accounts while recording the transaction is known as an error.
Types of Errors
There are four types of errors
1) Errors of principle
2) Errors of omission
3) Errors of commission
4) Compensating errors
Rectification of error:
Errors whether affecting trial balance or not to be located and corrected. The procedure followed to correct the errors and set it right the books of accounts is called rectification of errors.
Types of errors on the basis of Rectification
There are two types of Errors on the basis of Rectification
a) One-Sided Errors (Errors affecting one account)
b) Two-Sided Errors ( Errors affecting two or more accounts)
a) One-Sided Errors:
Wrong casting, wrong balancing and carrying forward, wrong posting, Partial omission, Wrong side of an account, wrong amount on one side.
b) Two-Sided Errors:
Compensating errors, errors of principle, posting to wrong account, recording wrong amount in original book, Errors of complete omission.
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Accountancy for Lawyer
You post a very informative blog, but these are gone now. Every business turns into digital. I knew about this term when I worked as an accountant. I faced this issue because there is a rule everything is recorded manually, but when a company buys the software called Quikbook after working on this software, everything is too easy for me. But now I have changed my profession and become a professional writer. After graduation, I joined Essay Writing Services in the UK, leading a team of writers. Once again, thank you so much for sharing with us.
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ReplyDeleteGreat explanation on the rectification of errors—it's such a crucial concept for maintaining accurate records. Reminds me of how attention to detail matters in every field, even in places like LMG Motors where precision is key!
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