Question
What are the different classes of errors? Which of them do not affect a Trial Balance?
✓
Answer
Keeping in view their nature, errors can be classified into following four categories:
- Errors of Omission.
- Errors of Commission.
- Errors of Principle.
- Compensating Errors.
- Errors of Principle, i.e., errors which arise due to incorrect application of principles of accounting. Suppose on purchase of a typewriter or printer, Office Expenses Account is debited, Trial Balance will still match.
- Compensating Errors: If the effect of one error is cancelled by the effect of some other error or errors, Trial Balance will still match. Suppose, an amount of ₹ 10 received from A is not credited to his account and the total of the Sales Book is ₹ 10 in excess, the omission of credit to A's Account will be made up by the increased credit to the Sales Account; the Trial Balance will still match.
- Errors of complete omission.
- Posting correct amount on the correct side but in wrong account.
- Recording wrong amount in the books of original entry (but the recorded amount is correctly debited and credited).
- Recording both aspects of a transaction twice in the books of account.
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₹
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(i)
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Bank Balance as per Pass Book.
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10,000
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(ii)
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Cheque deposited into bank but no entry was passed in Cash Book.
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500
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1,200
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20
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| $1^{\text {st }}$ April, 2022 (₹) | $31^{\text {st }}$ March, 2023 (₹) |
Stock-in-Trade | 16,700 | 18,100 |
Sundry Creditors | 15,400 | 19,200 |
Sundry Debtors | 27,200 | 15,600 |
Cash in Hand | 250 | 1,400 |
Bank Overdraft | 19,200 | Nil |
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Bank Balance | Nil | 2,900 |
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