Accounting errors are classified broadly into two groups: those that affect the agreement of a trial balance and those that don’t.

Errors Leaving the Trial Balance Unaffected

A trial balance will not be affected if the total of all debit entries in the ledger is equal to the total of all credit entries. Therefore, if, despite an error, debit entries remain equal to  credit entries, the trial balance will agree and hence fail to disclose the presence of an error.

Errors that do not affect the agreement of a trial balance are:

Errors Affecting the Trial Balance

If an error results in unequal debit and credit entries in the ledger, the trial balance will fall out of agreement and thereby disclose the presence of the error. Such errors are usually the result of clerical oversight. The following are the common ones:

Frequently Asked Questions

How are errors in the subsidiary accounts classified?

Errors in the subsidiary accounts are classified as either omissions or commissions.

How are errors in posting to the ledger classified?

Errors in posting to the ledger can be misplacement of entry, miscast entries (entering the wrong figure), failure to post (omission of posting) and arithmetical errors (in balancing the account).

How are errors in equitable allocation of charges or credits classified?

Errors in equitable allocation of charges or credits are classified as errors of principle or error in original entry.

How are arithmetical errors in accounting for stock, spoilage and wastage classified?

Arithmetical errors in accounting for stock, spoilage and wastage are divided into two classes: those that affect the Trial Balance and those that do not. Those that affect the Trial Balance are complete reversal of entries and mistakes in posting. Those that do not affect the Trial Balance are errors of principle.

How is error in original entry classified?

Error in original entry can be misplacement of figures (posting an incorrect figure) and miscast (entering an incorrect figure).

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