Friday, 18 December 2015

Summary of Errors

  • Errors which do not give rise to a difference in the Trial Balance totals are corrected by a double entry in the ledger accounts concerned. Their corrections do not involve the Suspense Account.  Such errors are listed as follows: 
  • Errors which cause a difference in the Trial Balance totals are corrected by a double entry, one of which has to be made in the Suspense Account set up to accommodate the difference in the books.  These errors are  listed as follows: 
  • If an entry is made on the wrong side of an account, the correction will require an amount double the original error.
  • If errors are discovered after the preparation of the final accounts and the Balance Sheet, the net profit and the Balance Sheet will have to be amended to correct the effect of the errors.

                               i.            Errors of Omission;  
                             ii.            Errors of Commission;  
                          iii.            Errors of Principle;    
                           iv.            Errors of Original Entry;  
                             v.            Compensating Errors;  
                           vi.            Complete Reversal of Entries.
                               i.            Errors that involve one side of a double entry, i.e. the entry may be omitted, or be on the wrong side, or be of the wrong amount;  
                             ii.            Errors resulting from undercasts or overcasts in the subsidiary books, or in ledger accounts.

No comments: