1.
Rectification of errors
Presented by
Harshit kushwah
Mohit kumar
Ronak sen
Akash narwariya
Presented to
Sr. Asst. prof.
Dr.Amitabha
maheshwari

2.
Introduction
•Rectification of errors in financial
accounting is the process of
identifying, correcting, and
preventing errors in financial
statements and records

3.
identification of errors
Financial errors can occur due to a variety of reasons
such as data entry mistakes, calculation errors, or
oversight. It's essential to have internal controls and
procedures in place to detect errors early. Auditing and
reviewing financial statements regularly can also help to
identify errors.

4.
Types of errors
Two sided errors
 Errors of comission
 Errors of orignal entry
 Errors of principal
(not affecting the trial balance agreement)
One sided errors
Suspense Account
(Affecting the trial balance
agreement)

5.
Errors of commission
It mean that a transaction instead of being
record in the right account, has been
recorded in the wrong account on the same
class.
Correct entry wrong entry rectify entry
A 3000 B 3000 A 3000
To sales 3000 To sales 3000 B To sales 3000
A sale of rs.3000 to A was wrongly debited to the account of B

6.
Two sided errors
Errors of original entry
It means that the amount of a transaction
has been wrongly recorded in the journal
and the same wrong amount was also
posted in the ledger

7.
example
Goods sold to Mr. Naeem for rs 5000 was wrongly
recorded in the sales journal at rs 500
And the same amount of rs 500 is posted both in
the Mr. Naeem A/c and in sales A/c
Correct entry wrong entry rectify entry
Mr. naeem 5000 Mr. naeem 500 Mr. naeem 4500
To sales 5000 To sales 500 To sales 4500

8.
Errors of principle
Errors of principle mean errors caused due to
violation of generally accepted accounting
principles e.g. incorrect allocation between
capital and revenue items.
Treating capital expenditure as a revenue expenditure.
Treating revenue expenditure as a capital expenditure.

9.
Example
•Paid wages on installation of new machinery on
rs. 10,000 but recorded as a wages expenses
Correct entry wrong entry recify entry
Machinery 10,000 wages exp. 10,000 machinery 10,000
cash 10,000 cash 10,000 wages exp. 10,000

10.
One sided errors
When these words like wrongly debited
wrongly credit and posted are used in
any statements then there is error in one
account. This is called One sided errors.

11.
Advantages of rectification of errors
 With rectification of errors, we can show of financial statements
correctly. We can save other interested parties from mislead.
 Rectification of errors will also helpful for good managerial
decisions. You know that one branch of accounting is
management accounting which provides useful information to
management. All its raw data comes from financial accounting.
If it will be incorrect, accounting information will be wrong and
decision on these accounting information will also be wrong.
Wrong decision will always increase the big loss of company.

12.
Thank you
hugug