Chapter 8 Type of errors Error of commission when a transaction is recorded with wrong amount or totalling of subsidiary books or error in balancing of accounts these are known as error of commission ID: 556525
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Slide1
Errors and their rectification
Chapter 8Slide2
Type of errors
Error of commission
=
when a transaction is recorded with wrong amount or
totalling
of subsidiary books or error in balancing of accounts these are known as error of commission.
Error of omission
=
when a transaction is not recorded in journal or subsidiary book it is known as error of omission.Slide3
errors
Errors of principle
= when accounting principles are violated while recording the
transcation
. E.g. revenue items taken as capital item or capital items taken as revenue items.
Error of compensation
= the error which
neutralise
the effect of other error.Slide4
Group of errors
1. two sided errors
=which have the effect on two accounts simultaneously. One a/c is wrongly dr. and other a/c is wrongly cr.
Effects= excess dr. side or
e
xcess
cr.side
short dr. or cr. Side
2. one sided error =
which effect only one side of account.Slide5
Suspense account
When the difference occur between the both side of trial balance and these are not matched then the difference will be transferred to the account known as suspense account.
Purpose to make it is to prepare final accounts in time.
Errors which affect trial balance are rectified by using suspense a/c.
Only one sided errors can be rectified by suspense a/c.Slide6
Only one sided errors can be rectified by suspense a/c.