Rectification Of Accounting Errors

Accountancy firm prepare trial balance to evaluate the correctness of medical data. If total of money balances does not acknowledge with the overall of credit balances, it is just a clear-cut indicator that certain errors have been committed while documenting the transactions in the books of original admittance or subsidiary books. That is our utmost obligation to locate these problems and rectify them, only then we should move forward for preparing final data files. We also know that all types of mistakes are not revealed by trial balance as some of the errors do not effect the total of trial balance. Therefore these can not be located by making use of trial balance. An scrivener should invest his energy to locate both types of errors and correct them before preparing trading, profit and loss accounts and balance sheet. Since if these are well prepared before rectification these will not give us the best result and profit and loss disclosed by them, shall not be the actual profit or reduction. a2x

All errors of accounting procedure can be labeled the following:

1. Problems of Rule

When a transaction is recorded against the fundamental principles of accounting, it is an error of principle. Pertaining to example, if earnings spending is treated as capital expenditure or the other way round. 

2. Paperwork Errors

These errors can again be sub-divided as follows:

(i) Errors of omission

When a deal is either wholly or partially not recorded in the books, it is an error of omission. It may be with regard to omission to enter a transaction in the books of original entry or with respect to omission to post a transaction from the books of original access to the account worried in the ledger.

(ii) Errors of commission payment

Once an entry is wrongly recorded either wholly or partially-incorrect posting, calculation, sending your line or balancing. Some of the errors of commission rate effect the trial balance whereas others do not. Errors effecting the trial balance can be exposed by preparing a trial balance.

(iii) Compensating problems

Sometimes a blunder is counter-balanced by another error in such a way that it is not disclosed by the trial balance. Many of these errors are called paying errors.

From the point of view of changement of the errors, place be divided into two groups:

(a) Errors influencing one account only, and

(b) Errors affecting two or more accounts.

Mistakes affecting one consideration

Mistakes which affect can be:

(a) Casting errors;

(b) error of posting;

(c) carry forward;

(d) weighing; and

(e) omission from trial balance.

Such mistakes should, first of all, be located and fixed. They are rectified either with the aid of journal entry or by giving an explanatory take note in the account worried.