Ankit Lal Karn  ACW Accounts At Edumarz

Errors can be categorized into 4 types:-

Let us understand each one by one –

  1. ERROR OF COMMISSION – this error occurs because of wrong posting of the transaction, wrong totaling or wrong balancing of account, the wrong casting of subsidiary books. For example – Sold goods to Rajat for 25000RS.

Entry was recorded correctly in the cashbook, but while making Sales A/C only 2500 rs was recorded.

  1. ERROR OF OMISSION – It is also of 2 types-

  1. Partial omission – when the transaction is partially omitted while recording. 

  2. Complete omission- when any transaction is completely omitted in the recording process.

      3. ERROR OF PRINCIPLE- when GAAP(Generally Accepted Accounting Principle) is ignored or violated while recording, then the error of principle occur. for example – capital expenditure may be treated as revenue expenditure, like the amount spent on installation of machinery is debited to wages A/c.

      4. COMPENSATING ERROR-  When two or more errors are committed in such a way that net results of debit and credit are nil, Such errors are compensatory in nature.

Such errors do not affect the tallying of the trial balance.

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