Loading....
Coupon Accepted Successfully!

 

Rectification of Errors which do not affect the Trial Balance

 

These errors are committed in two or more accounts. Such errors are also known as two sided errors. They can be rectified by passing a journal entry giving the correct debit and credit to the concerned accounts. These correcting entries can be recorded in the journal proper.

 

Examples of these errors are:
  • complete omission to record an entry in the books of original entry;

  • wrong recording of transactions in the book of accounts;

  • complete omission of posting to the wrong account on the correct side, and

  • Errors of principle.

The rectification process involves:
  • Canceling the effect of wrong debit or credit by reversing it; and
  • ​Restoring the effect of correct debit or credit.
​From this point, we have to analyse the error in terms of its effect on the accounts:
  1. Short debit or credit in an account; and/or
  2. Excess debit or credit in an account.
Therefore, rectification entry can be done by:
  1. Debiting the account with short debit or with excess credit,
  2. Crediting the account with excess debit or with short credit.
The procedure for rectification for such errors is explained with the help of following examples:
  1. Credit sales to Mohan Rs. 10,000 were not recorded in the sales book. This is an error of complete omission. Its affect is that Mohan's account has not been debited and Sales account has not been credited. Accordingly, recording usual entry for credit sales will rectify the error.
Mohan's A/c         Dr.
To Sales A/c
 

10,000

 

10,000
  1. Credit sales to Mohan Rs. 10,000 were recorded as Rs. 1,000 in the sales book.
This is an error of commission. The effect of wrong recording is shown below:

Mohan's A/c         Dr.
To Sales A/c
  1,000  
1,000

Correct effect should have been:
Mohan's A/c        Dr.
To Sales A/c
10,000  10,000

 

Now that Mohan's account has to be given an additional debit of Rs. 9,000 and sales account has to be credited with additional amount of Rs. 9,000, rectification entry will be:
Mohan's A/c   Dr.
To Sales A/c
9,000 9,000
  1. Credit sales to Mohan Rs. 10,000 were recorded as Rs. 12,000. This is an error of commission. The effect of wrong entry made has been:
Mohan's A/c         Dr.
To Sales A/c
12,000  12,000

 

Correct effect should have been:

 

Mohan's A/c    Dr.
To Sales A/c
10,000 10,000

 

You can see that there is an excess debit of Rs. 2,000 in Mohan's account and excess credit of Rs. 2,000 in sales account.

The, rectification entry will be recorded as follows:
Sales A/c    Dr.
To Mohan's A/c
2,000 2,000
  1. Credit sales to Mohan Rs. 10,000 was correctly recorded in the sales book but was posted to Ram's account. This is an error of commission. The effect of wrong posting has been:
Ram's A/c                    Dr.
To Sales A/c
 10,000  10,000

 

Correct effect should have been:
 
Mohan's A/c              Dr.
To Sales A/c
10,000

10,000

Notice that there is no error in sales account. But Ram's account has been debited with Rs. 10,000 instead of Mohan's account.

Hence rectification entry will be:
Mohan's A/c                Dr.
To Ram's A/c

 10,000

 10,000

  1. Rent paid Rs. 2,000 was wrongly shown as payment to landlord in the cash book:
The effect of wrong posting has been:
Landlord's A/c Dr.
To Cash A/c
 2,000 2,000

Correct effect should have been:
Rent A/c Dr. 
To Cash A/c
2,000

2,000

 

Landlord's account has been wrongly debited instead of Rent account.

Hence, rectification entry will be:
Rent A/c Dr.
To Landlord's A/c
2,000 2,000




Test Your Skills Now!
Take a Quiz now
Reviewer Name