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Rectification of Errors

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The errors or mistakes that are committed in the journal, ledger and in any other financial statements are known as accounting errors. Accounting errors may be defined as those mistakes, which are generally committed while recording the financial transactions in the books of accounts and preparing the accounting statements. Thus, these errors may be committed while maintaining books of accounts and preparing statements in the accounting process.

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Causes of accounting errors

  1. Lack of knowledge
    Accounting is based on certain principles and rules. Due to the lack of knowledge of the accounting principles and rules, accounting errors may occur.

  2. Carelessness
    Carelessness maybe another reason by which accounting errors may occur. If the person responsible for keeping books of accounts are not careful in his/her job such errors may crop up.

  3. Ineffective internal check
    Ineffective internal check system may also cause accounting errors. Ineffective internal check does not help in preventing accounting errors rather it encourages them.

  4. Dishonesty
    If the person who is responsible for keeping books of accounts is dishonest, s/ he may intentionally commit errors in the books of accounts for the purpose of taking undue advantage.

  5. Computer flaws
    A modern business keeps its accounts in computers. However, defective computer programme and easy access to unauthorized person to the accounting programme may also result in accounting errors.



  • Accounting errors may be defined as those mistakes, which are generally committed while recording the financial transactions in the books of accounts and preparing the accounting statements. 
  • If the person who is responsible for keeping boos of accounts is dishonest, s/ he may intentionally commit errors in the books of accounts for the purpose of taking undue advantage.
  • Accounting is based on certain principles and rules.
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Very Short Questions

The errors that are disclosed by trial balance are as follows:-

  1. Partial omission: If a transaction is recorded or posted partially in the journal or in the ledger, such an error affects the agreement of the trial balance and is disclosed.
  2. Posting a wrong amount in a accounts: Posting a wrong amount from the book of original entry to a ledger account affects the total of trial balance and is disclosed.
  3. Posting on the wrong side of an account: If an amount is posted on the wrong side of an account from the book of original entry, such as error affects the totals of trial balance is diclosed.
  4. Wrong casting of subsidiary books and wrong balancing of an account: Incorrect totalling of subsidiary books and balancing of ledger accounts also result in the disagreement of the trial balance and is disclosed.

The following are some of the errors not disclosed by trial balance:-

  1. Complete omission: The complete omission of recording a financial transaction in the book of original entry or omission of posting an entry from journal to ledger accounts makes no impact on the totals of the trial balance and is not disclosed.
  2. Posting a wrong amount in subsidiary books and ledger: Trial balance cannot disclose the entry of a wrong amount in a subsidiary book and ledger.
  3. Posting in wrong accounts: If an amount is wrongly posted on the right side of wrong account the the error will not affect the agreement of the trial balance and hence is not disclosed by trial balance.
  4. Errors of principle: Errors of principle are also not disclosed by thr trial balance.

The methods of locaring the errors are:-

  • Check the total of the trial balance.
  • Verify that all journal entries are posted into ledgers
  • Compare the ledger account balances carried to the trial balance.
  • Verify the total os subsidiary books and their postings to ledger.

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  • Errors are ______ in accounting processes.

    inevitable
    uncertain
    undertermined
    avoidable
  • What is the full form of GAAP?

    Generally Accepted Accounting Principles


    Generally Accepted Accounting Procedures


    Genuinely Accepted Attributting Principles


    Generally Advanced Accounting Projects


  • The errors and mistakes which are committed in recording or posting the transactions due to carelessness, lack of accounting knowledge or bad intention of the staffs are called ______.

    topological errors
    accounting errors
    mathematical errors
    arithmetical errors
  • Which one of them is the error disclosed by the trial balance?

    Errors of duplication
    Errors of complete omission
    Obtaining wrong balance of an account
    Errors of principles
  • Which one of them is the error not disclosed by the trial balance?

    Posting wrong amount in an account
    Compensating errors
    Omitting to post in an account
    Committing errors in the trial balance
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