Kinds of errors

Mistakes can happen while recording (in the journal or a special book) or while posting (in the ledger). There are four kinds.

• Errors of omission: something is left out. Complete omission means the transaction was never recorded at all. Partial omission means it was recorded but not posted to one of the accounts.
• Errors of commission: something is done wrongly: a wrong amount (₹25,000 posted as ₹2,500), the wrong account, the wrong side, or a mistake in adding up (casting) or balancing.
• Errors of principle: an accounting rule is broken, usually by mixing up capital and revenue items. Additions to a building debited to Repairs, or repairs to a machine debited to the Machinery account.
• Compensating errors: two mistakes cancel each other out. If the purchases book is overcast by ₹10,000 and the sales return book is undercast by ₹10,000, the totals still agree, but both are wrong.

Some errors stop the trial balance from agreeing; others do not. Complete omission, errors of principle and compensating errors leave both columns equal, so a trial balance that agrees can still hide them.

When the trial balance does not agree, search step by step: add up both columns again; check that every ledger balance has been copied, and on the right side; compare with last year's figures; recheck the balancing of each account and the posting from the books.

Two clever tricks. If the difference can be divided by 2, look for an amount of half that size posted on the wrong side: a difference of ₹1,500 may be a credit of ₹750 posted as a debit. If the difference can be divided by 9, look for two digits swapped (a transposition): 954 written as 459 gives a difference of 495, and 495 ÷ 9 = 55.