Errors and Correction of Errors in Financial Accounting

Flashcards covering key concepts related to financial accounting errors and corrections.

Error of Omission

A transaction that is completely omitted from the books.

Error of Commission

The correct amount is entered but in the wrong account of the same class.

Error of Principle

A transaction entered in the wrong class of accounts.

Error of Original Entry

The figure taken from the source document is incorrect and entered in all affected accounts.

Compensating Errors

Errors that cancel or balance each other, affecting both debit and credit balances.

Error of Complete Reversal of Entries

Correct amounts are entered but on the wrong side of the accounts.

Suspense Account

An account used to clear a difference when the trial balance cannot be balanced.

Single-Sided Error

The double entry is not completed, impacting only one side of an account.

Double-Sided Error

Transaction is posted using only debits or only credits.

Slide Error

One or more zeroes are added to or left off a number.

Transposition Error

Same digits used in the wrong order in one account.