Rectification of errors

1. WELCOME TO PPT
Presented by
SHINY PRATAP
Commerce option
BNVCTE

2. DETECTION
&
RECTIFICATION
OF ERRORS

3. • Types of errors
• Clerical error
• Errors of principle
• Detection of errors
• Classification of errors based on rectification
• Error disclosed by trial balance
• Errors not disclosed by trial balance
• Rectification of errors
• Rectification entries
CONTENT

4. TYPES OF ERRORS
Errors
Clerical Errors Error Of Principle

5. CLERICAL ERRORS
Errors of Omission
Errors of Commission
Compensating Errors
Complete omission
Partial omission
Mistakes committed by
accounting staff
Errors occurred to
neutralize another error

6. Occurs when the accounting
principles are violated in
recording transactions
The trial balance remain
unaffected
ERRORS OF PRINCIPLE

7. • Trial balance does not tally
• Balancing of various accounts to be checked
• Posting to various accounts to be verified
• Debit and credit aspects in entries to be
checked
• Source documents to be verified
DETECTION OF ERRORS

8. For the purpose of rectification :
Errors are classified as
 Errors disclosed by Trial Balance
(One sided errors)
 Errors not disclosed by Trial Balance
(Two sided errors)

9. • Omission to post an amount into ledger
• Omission to post an amount in the trial balance
• Posting an amount in the wrong side of an account
• Posting of a wrong amount in ledger
• Wrong totalling or balancing of accounts
• Wrong totalling of subsidiary books
ERRORS DISCLOSED BY
TRIAL BALANCE

10. • Complete omission of a transaction in the books of
original entry
• Entering a wrong amount in the subsidiary books
• Posting of an amount in the wrong account
• Compensating errors
• Errors of principle
ERRORS NOT DISCLOSED BY
TRIAL BALANCE

11. • Errors should not be corrected by over writing
• Any error detected after preparing final
accounts need to be crossed out and corrected
by making fresh entry
• Any error detected after preparing final
accounts can be corrected by rectification
entries
RECTIFICATION OF ERRORS

12. RECTIFICATION ENTRIES
• ONE SIDED EROR
• No need for rectification
entries
• Neutralise the effect of error
by noting the correction
 TWO SIDED ERROR  Rectification entries required
 Cancelling the effect of
wrong debit or credit by
reversing the entry
 Restoring the effect of
correct debit or credit

13. THANK YOU