RECTIFICATION OF ERROR

 Ankit Lal Karn ACW Accounts At EDMARZ

The error may be classified into 2 types-

1. Errors that affect trial balance.

2. Errors which does not affect trial balance.

The errors which do not affect trial balance can be corrected by just passing journal entries, whereas errors that affect the trial balance generally affect only one account and can not be corrected by passing only one journal entry.

RECTIFICATION OF ERRORS WHICH DO NOT AFFECT TRIAL BALANCE-

• These errors are generally committed in two or more accounts.

• It’s also called 2 sided errors.

• It can be rectified by passing a single journal entry.

• Example – the complete omission of recording, complete omission of posting, wrong recording of the transaction.

    Rectification process involves:-    

•  Canceling the effect of wrong entry or reversing it. 

•  Making correct debit-credit entry.      

• For example – credit sale to Mohan for 10000 rs. Were not recorded in the sales book. So- 

                               Mohan’s A/c Dr. 10,000 

                                                   To Sales A/c 10,000   

  RECTIFICATION OF ERROR WHICH AFFECT TRIAL BALANCE-  

•  An error that affects only one account can be rectified by an explanatory note or by passing a journal entry with suspense A/C.          

Example – error of casting, error of carrying forward, error of balancing.