Classification of Errors in Accounting

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on October 12, 2021

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:

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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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