Correction of Errors not affected by Trial Balance

Accounting is based on double-entry rule; a debit entry will result in another corresponding credit entry and a credit entry will result in another corresponding debit entry. So, a trial balance will tend to balance. But trial balance do not always give you the correct balances. And there are also circumstances where the trial balance is balanced but are incorrect. It’s getting pretty confused here, you just need to note that when trial balance balanced, it doesn’t necessary mean that the trial balance is correct.

If you think you need to revise back on Trial Balance, click here.

There are six of them:

1) Error of Omission – As the name implies, this means that a transaction or event has been completely left out from the books. Follow the Debit – PEDARI rule and the Credit SCROLG rule to re-correct the error.

2) Error of Commission – This error means that posting is done to the wrong account of the same category. Here, the category can be  Debtors and Creditors. This error occur when you are supposed to post to a debtor name Carol, but due to a lot of debtors with similar names, say Caroline, then you could have posted in to Caroline account instead of Carol account.

3) Error of Principle – This error means that posting is done to a different category of account. So the PEDARI is consider to be different category, and so does SCROLG. So instead of posting to an expenses account, some could have mistakenly posted in assets account. In addition to debit side, when it comes to SCROLG, some could have mistakenly posted in revenues instead of gains. An emphasis here is that most often the mistakes apply to only “expenses and assets” and “gains and revenues.” The reason why I have made an emphasis here is that – the errors most likely come from mistakenly treated “expenses as assets” and “gains as revenues” or the reverse. 

4) Error of Original Entry – This error means that a wrong amount has been initially recorded in the book of original entry and subsequently posted to the ledger accounts. This error is just as simple as the name implies.

5) Compensating Errors – This error means that the debit side of an account is compensated by another error of the same/equal amount on the credit side in another account.

6) Error of Complete Reversal Entry – As the name implies, this means that the debit and credit entry recorded for a particular transaction are reversed. The transactions are incorrect but because the amount is the same or equal at both sides, the trial balance still balanced.

1st JAN: This post is till ongoing.

9 thoughts on “Correction of Errors not affected by Trial Balance”

  1. I’m very little directly into studying, however by some means I obtained to learn numerous content inside your webpage. It’s amazing just how interesting it is that i can go to anyone usually like to my aunt who is working an accountant in atlanta

  2. I love the way u’ ve explained things. It actually cleared some stubborn doubts.Plz keep up the gud work.

  3. I’ve always taken this topic as difficult as am not so interested in business but you have made it seem easier than it could be.
    Keep up!

  4. please, when correcting a reversal entry error, why must the amount be doubled and brought to the journal in its doubled value?

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