PPT - Trial Balance and Rectification of Errors Commerce Notes | EduRev

Accountancy Class 11

Commerce : PPT - Trial Balance and Rectification of Errors Commerce Notes | EduRev

 Page 2


    
Introduction
•
When the business transactions are recorded in the books of 
accounts there remains a possibility of accounting errors. It may 
be because of hastiness in writing, negligence, oversight or 
incomplete knowledge of the principles of accountancy. Some 
times in order to manipulate the books of accounts, errors are 
committed intentionally. 
•
Irrespective of whether the accounting errors are committed 
innocently or intentionally they cannot be rectified by erasing with 
the help of an eraser. Necessary accounting effects are to be given 
in accounts in order to rectify these errors. Sometimes in an error 
affects two accounts, in order to rectify the same, a journal entry is 
passed which is known as a rectification entry and it is recorded in 
journal proper.
•
Generally two principles should be taken into consideration to 
rectify the accounting errors.
  Undo what is wrong
Do what is correct.
•
Let us understand this point with the help of an illustration. 
Page 3


    
Introduction
•
When the business transactions are recorded in the books of 
accounts there remains a possibility of accounting errors. It may 
be because of hastiness in writing, negligence, oversight or 
incomplete knowledge of the principles of accountancy. Some 
times in order to manipulate the books of accounts, errors are 
committed intentionally. 
•
Irrespective of whether the accounting errors are committed 
innocently or intentionally they cannot be rectified by erasing with 
the help of an eraser. Necessary accounting effects are to be given 
in accounts in order to rectify these errors. Sometimes in an error 
affects two accounts, in order to rectify the same, a journal entry is 
passed which is known as a rectification entry and it is recorded in 
journal proper.
•
Generally two principles should be taken into consideration to 
rectify the accounting errors.
  Undo what is wrong
Do what is correct.
•
Let us understand this point with the help of an illustration. 
  
Rs.1,000 received from Akash is credited in the account of 
Vikash. To nullify the effect of wrong credit to Vikash’s account, 
debit his account by Rs.1000. (Undo what is wrong). Give 
correct effect for the omission of a credit of Rs 1,000 to Akash’s 
account. (Do what is correct) Necessary rectification entry will 
be written as under.
Date Particulars
L.
F.
Debit
Rs.
Credit
Rs.
Vikash’s A/c…………………………Dr.
             To Akash’s A/c
(Being the rectification of Rs.1,000 
received from Akash  wrongly 
credited to Vikash’s account.)
1,000 
1,000
Page 4


    
Introduction
•
When the business transactions are recorded in the books of 
accounts there remains a possibility of accounting errors. It may 
be because of hastiness in writing, negligence, oversight or 
incomplete knowledge of the principles of accountancy. Some 
times in order to manipulate the books of accounts, errors are 
committed intentionally. 
•
Irrespective of whether the accounting errors are committed 
innocently or intentionally they cannot be rectified by erasing with 
the help of an eraser. Necessary accounting effects are to be given 
in accounts in order to rectify these errors. Sometimes in an error 
affects two accounts, in order to rectify the same, a journal entry is 
passed which is known as a rectification entry and it is recorded in 
journal proper.
•
Generally two principles should be taken into consideration to 
rectify the accounting errors.
  Undo what is wrong
Do what is correct.
•
Let us understand this point with the help of an illustration. 
  
Rs.1,000 received from Akash is credited in the account of 
Vikash. To nullify the effect of wrong credit to Vikash’s account, 
debit his account by Rs.1000. (Undo what is wrong). Give 
correct effect for the omission of a credit of Rs 1,000 to Akash’s 
account. (Do what is correct) Necessary rectification entry will 
be written as under.
Date Particulars
L.
F.
Debit
Rs.
Credit
Rs.
Vikash’s A/c…………………………Dr.
             To Akash’s A/c
(Being the rectification of Rs.1,000 
received from Akash  wrongly 
credited to Vikash’s account.)
1,000 
1,000
  
TYPES OF ACCOUNTING ERROR:
•
Errors which do not affect the trial balance.
•
Errors which affect the trial balance.
Page 5


    
Introduction
•
When the business transactions are recorded in the books of 
accounts there remains a possibility of accounting errors. It may 
be because of hastiness in writing, negligence, oversight or 
incomplete knowledge of the principles of accountancy. Some 
times in order to manipulate the books of accounts, errors are 
committed intentionally. 
•
Irrespective of whether the accounting errors are committed 
innocently or intentionally they cannot be rectified by erasing with 
the help of an eraser. Necessary accounting effects are to be given 
in accounts in order to rectify these errors. Sometimes in an error 
affects two accounts, in order to rectify the same, a journal entry is 
passed which is known as a rectification entry and it is recorded in 
journal proper.
•
Generally two principles should be taken into consideration to 
rectify the accounting errors.
  Undo what is wrong
Do what is correct.
•
Let us understand this point with the help of an illustration. 
  
Rs.1,000 received from Akash is credited in the account of 
Vikash. To nullify the effect of wrong credit to Vikash’s account, 
debit his account by Rs.1000. (Undo what is wrong). Give 
correct effect for the omission of a credit of Rs 1,000 to Akash’s 
account. (Do what is correct) Necessary rectification entry will 
be written as under.
Date Particulars
L.
F.
Debit
Rs.
Credit
Rs.
Vikash’s A/c…………………………Dr.
             To Akash’s A/c
(Being the rectification of Rs.1,000 
received from Akash  wrongly 
credited to Vikash’s account.)
1,000 
1,000
  
TYPES OF ACCOUNTING ERROR:
•
Errors which do not affect the trial balance.
•
Errors which affect the trial balance.
  
Errors which do not affect the 
trial balance
•
Errors of Omission
•
Errors of Principle
•
Errors of recording to a wrong account
•
Errors committed at the time of recording in 
primary books (Error of commission)
•
Compensatory errors
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