If an entry is posted on the wrong side of the relevant ledger account, the effect is that both entries relating to the transaction will be on the same side of the ledger. This will cause the trial balance to go out of agreement.

Example

An invoice for $520, issued to Sara, was entered correctly in the sales book but posted to the credit side of her personal account in the ledger.

It follows that whereas the sales account would be correctly credited. Sara’s personal account would have a Cr. entry of $520 instead of a Dr. entry for that amount.

To rectify this error, Sara’s personal account should be debited with twice the amount. Also, the corresponding credit entry should appear in the suspense account.
Sara Rectification Entry in Journal
An invoice for $2,430, received from Sydney Traders, was recorded correctly in the purchases book but posted to the debit side of the Sydney Traders account.

It follows that the purchases account would be correctly debited, whereas the Sydney Traders account would have a Dr. entry instead of a Cr. entry for $2,430.

To rectify this error, it is necessary to credit the Sydney Traders account by twice the amount (i.e., $4,860). Also, the suspense account should be credited to complete the double entry.
Sydney Traders Rectification Entry in Journal

Frequently Asked Questions

What will happen if an entry is posted on the wrong side of the relevant ledger account?

The effect is that both entries relating to the transaction will be on the same side of the ledger. This will cause the Trial Balance to go out of agreement.

How do you rectify the error of posting to the correct account but on the wrong side?

The account should be debited with twice the amount. Also, the corresponding credit entry should appear in the suspense account.

Can I correct an entry myself if I have posted it on the wrong side of the ledger?

Yes, you can correct an entry that you have posted on the wrong side of the ledger. However, it is advisable to seek professional help if you are unsure about how to correctly post the entries.

What is the effect of not correcting an entry that has been posted on the wrong side of the ledger?

If an entry is not corrected after it has been posted on the wrong side of the ledger, the error will continue to propagate throughout the Financial Statements. This can lead to material misstatements in the Financial Statements and potentially cause regulatory problems.

How do I know if an entry has been posted on the wrong side of the ledger?

If an entry has been posted on the wrong side of the ledger, the Trial Balance will be out of agreement. This means that the total debits will not equal the total credits. Additionally, there may be entries in the suspense account which need to be investigated.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, 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, or check out his speaker profile on the CFA Institute website.