In the previous chapter we have learnt that a Trial Balance is prepared to
check the arithmatic accuracy of transactions recorded in a Journal, posting them into
the ledger and balancing the ledger account. If a Trial Balance agrees, it is assumed
that recording, posting etc. have been done correctly. But this is only partially correct
because even if Trial Balance agrees, there may be some errors in the accounting
For example if a credit sale is omitted to be entered in the Sales Book, it will notaffect>
the trial balance because both the Debit and the Credit aspects of this transaction
are not recorded. In other words errors in the records may or may not affect Trial
Important : The errors whether affecting the Trial Balance or not must be
detected and rectified.
|Type of Error with Meaning
||Sub-Types with Examples
I. Error of Omission
completely or partialy omitted to be recored in the books)
(a) Error of Complete Omission
Goods sold to X on Credit but not recorded in Sales Book.
*(b) Partial Ommission
Goods sold to X on Credit recorded in Sales
Book but not posted to the A/c of X, thus sales
A/c is credited but X is not debited creating
short debit. This error will affect Trial Balance.
II. Error of Commission
(These errors are caused due to wrong recording of transactions wrong totalling of subsidiary books or Ledger A/cs, Wrong posting and wrong carry forward)
(a) Error of Recording in the Book
Of Original Entry
Goods purchased from Ravi for Rs. 450, recorded as Rs. 540, in the Purchase Book. (This error will not affect Trial Balance as same amount will be posted in both the A/cs, Purchase A/c as well as Ravi.)
*(b) Wrong Totalling of Subsidiary Book.
Example : Purchase Book has been undercast
(short totalled) by Rs. 100, Purchase A/c will
be debited short by Rs. 100, decreasing the debit
side of Trial Balance by Rs. 100.
(c) Error in Totalling or Balancing of
Example : Creditors A/c has been balanced short
by Rs. 500, then Trial Balance will Rs. 500 short
in Credit side.
(d) Error of Posting
*(i) Posting to the wrong side but correct
Goods sold to X for Rs. 550, entered to the credit
of X's A/c instead of posting to the debit side of
*(ii) Posting with wrong amount.
*(iii) Posting twice in an A/c.
(iv) Errors in posting to the wrong A/c but
correct side don't affect Trial Balance.
*(e) Error in carrying forward.
Total of purchase book Rs. 2,500 is carried
forward as Rs. 2050 Creating short debit of
Rs. 450, in Purchase A/c and in turn short debit
in Trial Balance.
III. Errors of Principles.
(These errors are caused due to the violation of accounting principles i.e. allocation between Capital and Revenue Items.
(a) Treating capital items as revenue item
Example : Wages paid for the installation of a new machinery charged to Wages A/c instead of Machinery A/c.
(b) Treating Revenue Items as Capital Item
Example : Rs. 200 paid for the repairs of an old
Machinery but debited to Machinery A/c instead
of Repairs A/c.
IV. Compersation Errors
(Two or more errors committed in such a way that the net effect of these errors of the debit and credits of A/cs is nil).
|Example : On July, 1st 2011 a sum of Rs. 2,000 paid to Mohit is posted as Rs. 200 to the Debit of his A/c and on July 20th, 2011 a sum of Rs. 200 paid to Sonil has been posted as Rs. 2,000 to the Debit of his A/c. Net Effect will
From Rectification point of view, errors are classified into the following two
categories only :
Case I : Errors which don't affect the Trial Balance
Two Sided Errors
Case II : Errors which affect the Trial Balance
one Sided Errors.