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Errors
- 1. WELCOME TO PPT Presented by SHINY PRATAP Commerce option BNVCTE
- 2. DETECTION & RECTIFICATION OF ERRORS
- 3. • Types oferrors • 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 Errorsof Omission Errors of Commission Compensating Errors Complete omission Partial omission Mistakes committed by accounting staff Errors occurred to neutralize another error
- 6. Occurs when theaccounting principles are violated in recording transactions The trial balance remain unaffected ERRORS OF PRINCIPLE
- 7. • Trial balancedoes 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 purposeof rectification : Errors are classified as Errors disclosed by Trial Balance (One sided errors) Errors not disclosed by Trial Balance (Two sided errors)
- 9. • Omission topost 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 omissionof 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 shouldnot 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
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