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Rectification of Errors

The document discusses the rectification of errors in accounting. It defines different types of errors like errors of principle, clerical errors, errors of omission, and errors of commission. Errors are classified as one-sided errors, which affect one account, or two-sided errors, which affect two or more accounts. Examples of one-sided errors include errors in casting, carrying forward, and posting. Two-sided errors may involve omission, recording errors, or posting to the wrong account. The document provides steps for rectifying two-sided errors, including recording the correct entry, wrong entry, and rectifying entry. It then lists 29 examples of two-sided errors and their rectification.

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Roshini A
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© © All Rights Reserved
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163 views

Rectification of Errors

The document discusses the rectification of errors in accounting. It defines different types of errors like errors of principle, clerical errors, errors of omission, and errors of commission. Errors are classified as one-sided errors, which affect one account, or two-sided errors, which affect two or more accounts. Examples of one-sided errors include errors in casting, carrying forward, and posting. Two-sided errors may involve omission, recording errors, or posting to the wrong account. The document provides steps for rectifying two-sided errors, including recording the correct entry, wrong entry, and rectifying entry. It then lists 29 examples of two-sided errors and their rectification.

Uploaded by

Roshini A
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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RECTIFICATION OF ERRORS

Introduction: Errors or mistakes may arise out of the innocence or carelessness on the part of those
responsible for the preparation of account. Sometimes, errors may be the outcome of fraudulent
manipulation of accounts. Errors or mistakes may be committed in different stages of the accounting
process. The errors have to be located and corrected at the earliest to ensure the correctness of
accounts. If errors are not rectified, the profit disclosed by the profit and loss account cannot be
relied upon and balance sheet also becomes undependable.

Classification of errors

 ERROR OF PRINCIPLE- An error of principle is an accounting mistake in which an entry


violates a fundamental principle of accounting or a fundamental
accounting principle established by a company.

Capital and revenue items

Improper valuation

Erratic provisioning

 CLERICAL ERRORS - A clerical error is an error on the part of an office worker, often a secretary
personal assistant. It is a phrase which can also be used as an excuse to deflect blame away
from specific individuals, such as high-powered executives, and instead redirect it to the more
anonymous clerical staff

 ERROR OF OMISSION - Errors of omission are also sometimes called "false


negatives." They refer to instances in which someone or something is erroneously
excluded from consideration when they or it should have been included.

Partial omission & Complete omission

 ERROR OF COMMISSION - Error of commission is an error that occurs when a


bookkeeper or accountant records a debit or credit to the correct account but to the
wrong subsidiary account or ledger. For example, money that has been received from
a customer is credited properly to the accounts receivable account, but to the wrong
customer.

Error of posting, error of casting, error of posting and error of carry forward

Compensating errors- compensating errors are also known as offsetting


errors. An error compensated or counter balanced by another error is called compensating
error.

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RECTIFICATION OF ERRORS

Classification of errors from rectification point of view

1. Errors, which affect one account


2. Errors, which affect two accounts

Errors, which affect one account, i.e., one Errors, which affect tow or more accounts
sided errors
 Errors in casting  Error of omission
 Errors in carrying forward  Error of recording
 Errors in posting  Error of posting to wrong account
 Errors in balancing  Error of principle
 Forgetting to show in the trial balance

1. Rectify the following errors; errors in casting


a. Purchases book is overcast by Rs.700
b. Sales book has been under casy by Rs.1000
c. Purchases returns book has been over casy by Rs.200
d. Sales returns book has beeen undercasy by Rs.500
2. Rectify the following errors;- errors incarrying forward
a. Purchases book carried forwards Rs.10 less
b. Sales book carried forwards Rs.15 less.
c. Sales book carried forwards Rs.32 instead of Rs.23
3. Rectify the following errors:- Errors in posting
a. Sales to Murali & Co for Rs.1340 has been posted to his account as Rs.1430
b. Purchase from sumathy for Rs.2000 has been posted to the debit side of her
account.
c. Sales to oPrasanna for Rs.1840 has been posted to his credit as Rs.1480.
d. Purchases from Rames, for Rs.800 has been omitted to be posted to the personal
account.

Errors, which affect tow or more accounts- for rectification of these types of errors, the
following steps should be taken.

Step1: write down in the correct entry

Step 2: wrtite down the wrong entry actually passed.

Step 3: write down the rectifying entry- entry to rectify the error.

Sum :1

1. purchase of Rs.4000 from Rahul entereed in the day book as Rs.400

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RECTIFICATION OF ERRORS

2. A cash sales of Rs.10000 has completely been omitted to be recorded in the books.
3. Rs.5000 received from ram entered as Rs.3000 in the cash book.
4. Sales to Rahul Rs.2800 has not been recorded.
5. Purchases from ramu for Rs.500 has not been recorded in purchases book completely
6. Sales returns by rahul rs.300 has not been recorded.
7. B/R rs.4000 endorsed to bharath has not been recorded in the book.
8. Sales to lakshman rs.1800 has been recorded as rs.1300.
9. Sales to selvam rs.2300 has been recorded as rs.3200
10. Wages paid rs.1225 has been recorded as rs.1205.
11. Sales to saravanan rs.1000 has been posted in murugan account.
12. Sales to rahul rs.10000 has been debited to gokul account.
13. Sales to mohan rs.5000 has been credited to raghavan account.
14. Sales to rajesh rs.5000 debited to suresh account as rs.500.
15. Wages given to building construction rs.4000 has been debited to wages account.
16. Purchase of machinery rs.50000 has been posted to purchases account.
17. Sale of old furniture rs.500 has been posted to sales book.
18. Salary given to ravi rs.1500 dbited to his account.
19. Repair expense rs.675 debited to building account.
20. Drawing made by the proprietor rs.1000 debited as trade expense account.
21. Cheque received from shankar and dishonoured rs.6000, posted in the debit side of
sales returns account.
22. Fan purchased rs.2000 debited to purchase account.
23. Coolie paid in connection with the purchase of furniture rs.50 posted in coolie
account.
24. A purchase of goods from devan amounting too Rs.250 has been wrongly passed
through the sales book.
25. A credit sale of goodsRs.300 to rajan has been wrongly passed through the purchases
book.
26. Sold old furniture for Rs.15000 passed through the sales book.
27. Paid wages for the construction of building debited to wages account rs.10000
28. A acheque for rs.500 received from madam was dishonoured and had posted to the
debit of sales returns account.
29. Paid rs.1000 for the installation of machinery debited to wages account.
30. On 31st Dec 2008 goods for the value of rs.500 were returned by gurudev and were
taken into stock on the same date, but no entry was passed in the books

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RECTIFICATION OF ERRORS

Rectification of Errors Page 4

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