RECTIFICATION OF ERRORS
Correction of errors, if
located after some time, is always made by a proper journal entry and not by
simply crossing the wrong amount and inserting the right one. A complete
explanation for the correction made should be given so that no difficulty is
experienced later when accounts are checked. From the point of view of
rectification, errors are of two type:—
a) Error that affect the
trial balance; and
b) Errors that do not
affect the trial balance.
Correction of such error
that affect the trial balance would not be through journal entry, only
corrective amount placed on the proper side will suffice. Some of the examples
of such types of errors are as follows :—
1) An amount of Rs 150 for a
credit sale to Mr. X correctly entered in the sales book, has been debited to
his account as RS 105. In this case the amount has been correctly entered in
the sales book and. therefore, the sales account has been correctly posted. The
mistakes lies only in the account of Mr. X . who should have been debit with
Rs. 150 and has been debited . instead , with RS 105. The correcting entry is
to .—
Mr. X Account
Dr Rs. 45.00
To
mistakes in posting on
Rs.45.00
(Being
amount wrongly posted in Mr. X A/C for RS 105 instead of Rs. 150 )
2) An amount of Rs. 150 for a
credit sale to D.K. Kapoor. correctly entered in sales book. has be credited to
him. in this case also the sales account has been correctly posted and the
mistakes lies only in the
account
of D. K. Kapoor, who has been credited instead of debited. The correcting entry
is to debit him with Rs. 300, Rs. 150 to remove the wrong credit and Rs. 150
for the rightful debit. The caption will be “To mistake in Posting on”
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Salary of a Qualified CMA
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Best Career Option After Class 12th
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Why to choose career in "CMA" ?
The Reasons to Choose a Career in "CMA"
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