How are entries rectified before preparing trial balance?

Banking & FinanceFinance ManagementGrowth & Empowerment

Rectification of errors can be classified into two types, namely single side error and double side error, if the error is identified before preparing trial balance.

  • Single side error

Entry is rectified by an appropriate posting in an affected account.

Example − Entry in purchase account over casted by Rs. 15,000/-

Correction

Dr.
Cr Purchase account
ParticularsAmount (in rupees)ParticularsAmount (in rupees)
To
By error
− wrong posting
15000
  • Double side error

While correcting the error, following principles are followed −

  • Identify the correct entry.
  • The entry is recorded.
  • Rectification of entry.

Example − Company purchased a building worth of Rs.5,00,000/- and while recording, they wrongly passed in the purchased account.

The rectification is as follows −

ParticularsDebitCredit
Building A/c
To cash A/c
500000
500000
Purchase A/c
To cash A/c
500000
500000
Building A/c
To cash A/c
500000
500000


raja
Published on 12-Jul-2021 11:55:53
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