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Rectification

The document describes different types of errors in accounting: errors of omission where transactions are not recorded; errors of commission where transactions are recorded incorrectly; errors of principle where accounts are posted to incorrect ledger accounts; errors of original entry where transactions are recorded incorrectly; and errors of complete reversal where transactions are recorded with opposite signs.

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Vineet Grover
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14 views

Rectification

The document describes different types of errors in accounting: errors of omission where transactions are not recorded; errors of commission where transactions are recorded incorrectly; errors of principle where accounts are posted to incorrect ledger accounts; errors of original entry where transactions are recorded incorrectly; and errors of complete reversal where transactions are recorded with opposite signs.

Uploaded by

Vineet Grover
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Error of Omission

A credit note for $2,750, received from Hattar Wholesalers, was misplaced
and not recorded in the books. It was discovered two months later on 21 July
2017.

I. A cash purchase of $850 was not recorded in the books.


II. Drawings of goods of $300 by the proprietor for his own use were not recorded in
the books.
III. Goods of $70 taken by Cocoland for his home use were not recorded in the
books.
Credit sales to Mohan R 7,000 were not recorded.
Credit purchases from Rohan 9,000 were not recorded.
Goods returned to Rakesh 4,000 were not recorded.
Goods returned from Mahesh 1,000 were not recorded.

Error of Commission
I. $400 paid to Mike was debited by mistake to Michael’s account.
II. A sale of goods of $1200 from Fiama was recorded in Fiona’s account.
Cash received from Kohli 2,000 was posted to Kapur’s account.
Cash paid to Babu 1,500 was posted to Sabu’s account.
Credit sales to Mohan Rs. 7,000 were posted to Karan.
Credit purchases from Rohan Rs. 9,000 were posted to Gobind.
Goods returned to Rakesh Rs. 4,000 were posted to Naresh.
Goods returned from Mahesh Rs. 1,000 were posted to Manish.

Error of Principle

I.
II. Repairs of vehicles of $500 were posted to vehicles account.
III. $60 of cash paid for rent was debited to the rates account.
IV. $500 paid for maintenance was recorded in the Machinery account.
V. A sale of office furniture for $200 was credited to the sales account.
VI. The purchase of $340 of fixtures was posted in the stationery account.
Salary paid 5,000 was debited to employee’s personal account.
Rent Paid 4,000 was posted to landlord’s personal account.
Goods withdrawn by proprietor for personal use 1,000 were debited to sundry
expenses account.
Purchase of furniture for 615 passed through Purchase Book.
7,700 paid for wages to workman for making showcases had been charged to
wages account.
Error of Original Entry

I. Payment of rent $1000 was recorded as $100 in the books.


II. A sale of old furniture on credit to Kok Hui of $880 was recorded in the books as
$800.
III.
IV. A sale of goods of $1200 from Mani was recorded in Maniam’s account.
Credit sales to Mohan 7,000 were recorded as 700.
Credit purchases from Rohan 9,000 were recorded. As 900.
Goods returned to Rakesh 4,000 were recorded as 400.
Goods returned from Mahesh 1,000 were recorded as 100.
Credit sales to Mohan 7,000 were recorded as 7,200.
Credit purchases from Rohan 9,000 were recorded as 9,900.
Goods returned to Rakesh 4,000 were recorded as 4,040.
Goods returned from Mahesh 1,000 were recorded as 1,600.

Error of Complete reversal

I. Commission received of $900 was wrongly debited to the Commission Revenue


account and credited to the Cash account.
II.

III.

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