Notes, Exercises, Videos, Tests and Things to Remember on Methods of Locating and Rectifying Errors
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If any errors exit in the books, it affects the accuracy of results of business operations revealed by the financial statements. Therefore, the error must be located for its rectification. The task of locating errors is, however, not easy. The location of errors will be easier if the following steps are systematically taken:
Once an error is located, it should be properly corrected. The correction of accounting errors in a systematic manner is called the rectification of errors. In other words, the process of systematically correcting the accounting errors is known as rectification of errors. The presence of accounting errors affects the accuracy of the profit or loss and the financial position of the business shown by the final accounts, therefore, no error should be left uncorrected.
The following methods should be followed to rectify the accounting errors:
While examining the book of accounts for locating the errors, it would be better to follow some steps one after another serially to make the re-examination work easier and quicker. For this reason, the following steps should be followed for locating the errors: -
Adjustment and closing of the trial balance is ______ process of closing.
none of the options are correct
The ______ is newly opened account with the difference amount of the trial balance.