Classification of errors in accounting

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on June 22, 2021

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

Errors not affecting the trial balance

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. Thus if, despite an error, debit entries remain equal to the 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 of omission
  • Errors of commission
  • Errors of principle
  • Errors in original entry
  • Complete reversal of entries
  • Errors affecting the trial balance
  • Compensating errors.

Errors affecting the trial balance

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

  • Miscast in subsidiary account
  • Posting a wrong amount to the ledger
  • Posting an entry on the wrong side of the ledger
  • Failure to post an entry to the ledger
  • Arithmetical error in balancing an account

6 thoughts on “Classification of errors in accounting”

  1. How come I don’t see Error Transposition.
    What is the difference between Errors of Transposition and Errors of Original Entry?

    Reply
    • An error of original entry is when… double entry will use incorrect figure(amount) Eg: Goods, $100, bought on credit but recorded as $1000

      Reply
    • Hi Bosco,
      Please revisit the site within 24 to 36 hours. We will update the topic you suggested. We will also notify you via email.
      Thanks for your suggestion.

      Reply

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