Question

Answer the question.
Explain the different types of errors in the Accounting process?

Answer 1

Errors can broadly be classified in two categories:
$1$. Errors of Omission: If a transaction has not been entered in the books of account either wholly or partially is known as an error of omission.
$2$. Errors of Commission: These refer to a transaction being incorrectly recorded in the journal or inaccurately posted in the ledger.
$3$. Compensating Errors: These errors arise when two or more errors exactly nullify the effect of one another. Thus, the errors are such that their over all effect on the trial balance is nil.
$4$. Error of Principle: These arise when some fundamental principles of sound accountancy are not strictly adhered to in recording a transaction.