Explain the types of accounting errors with examples.
Dear Student,
There are four types of accounting errors.
1) Errors of omission- An error of omission is an error when a transaction is omitted to be recorded in the books of account. Example is sold goods to ram has been not recorded in the sales book. Errors of omission includes two types of error-
a) Error of complete omission. b) Error of Partial omission.
2) Errors of Commission- These are those errors which arise due to wrong recording, wrong posting ,etc. Example is wrong carrying forward etc. These includes four types of errors-
a) Error of recording b) Error of casting c) Error of carrying forward d) Error of Posting.
3) Errors of Principle- These errors occur when proper distinction is not made between revenue and capital items while recording transactions .
4) Compensating Errors- These are those errors whose effect is nullified by another error of equal amount. Example is Ramu account was debited with 100 instead of 1000.
Regards
There are four types of accounting errors.
1) Errors of omission- An error of omission is an error when a transaction is omitted to be recorded in the books of account. Example is sold goods to ram has been not recorded in the sales book. Errors of omission includes two types of error-
a) Error of complete omission. b) Error of Partial omission.
2) Errors of Commission- These are those errors which arise due to wrong recording, wrong posting ,etc. Example is wrong carrying forward etc. These includes four types of errors-
a) Error of recording b) Error of casting c) Error of carrying forward d) Error of Posting.
3) Errors of Principle- These errors occur when proper distinction is not made between revenue and capital items while recording transactions .
4) Compensating Errors- These are those errors whose effect is nullified by another error of equal amount. Example is Ramu account was debited with 100 instead of 1000.
Regards