Accountants may make some mistakes during their accounting steps, and these errors are either discovered during the financial period at the stage of registration or posting or when preparing the trial balance, or they are discovered in the coming financial periods, and we will explain in this lesson and the lesson after it about the types of errors Accounting and methods of treatment and correction.
Types of accounting errors:
Accounting errors that occur in the company can be classified into several categories as follows:
Accounting errors that occur in the company can be classified into several categories as follows:
First, the types of accounting errors according to their nature:
Omissions or omissions:
They are the errors that occur when the accountant neglects to record a financial transaction in the daily book, or one of the parties to the entry is recorded without the other party, or it may occur as a result of not posting both parties to the entry or one of its parties to the general ledger or to the auxiliary ledgers.
erroneous errors:
These are errors that are committed due to an error in recording or posting, and these errors are either intentional with the intent of fraud and misappropriation or for another reason, such as recording the transaction for the account of the debtor other than the debtor owed, or posting the amounts contained in the journal to another account that has nothing to do with the financial transaction Or that the error in recording the amounts is due to a mistake in the addition or subtraction process, or otherwise.
Technical errors:
These errors may occur due to failure to apply generally accepted accounting principles when recording entries and preparing financial reports.
Equivalent errors:
They are the mistakes that are equivalent to each other and compensate for each other.
Secondly, the types of errors in terms of their impact on the balance of the balance:
They are the errors that occur when the accountant neglects to record a financial transaction in the daily book, or one of the parties to the entry is recorded without the other party, or it may occur as a result of not posting both parties to the entry or one of its parties to the general ledger or to the auxiliary ledgers.
erroneous errors:
These are errors that are committed due to an error in recording or posting, and these errors are either intentional with the intent of fraud and misappropriation or for another reason, such as recording the transaction for the account of the debtor other than the debtor owed, or posting the amounts contained in the journal to another account that has nothing to do with the financial transaction Or that the error in recording the amounts is due to a mistake in the addition or subtraction process, or otherwise.
Technical errors:
These errors may occur due to failure to apply generally accepted accounting principles when recording entries and preparing financial reports.
Equivalent errors:
They are the mistakes that are equivalent to each other and compensate for each other.
Secondly, the types of errors in terms of their impact on the balance of the balance:
Errors affecting the balance of the trial balance:
They are errors that, if they occur, will make the debit side not equal with the credit side in the trial balance, which may occur as a result of an error when recording the entry in the daily book, or as a result of deporting one party without another party, or when balancing. .
Errors do not affect the balance of the trial balance
These are errors that, if they occurred, would remain the debit side and the credit side of the trial balance equal.
Third, the types of accounting errors in terms of the period of their discovery:
They are errors that, if they occur, will make the debit side not equal with the credit side in the trial balance, which may occur as a result of an error when recording the entry in the daily book, or as a result of deporting one party without another party, or when balancing. .
Errors do not affect the balance of the trial balance
These are errors that, if they occurred, would remain the debit side and the credit side of the trial balance equal.
Third, the types of accounting errors in terms of the period of their discovery:
Errors that occurred during the current financial period and were discovered during the same period:
In this case, the correction process will be easy and will not have an impact on the financial statements at the end of the period.
Errors that occurred in previous periods and were discovered in the current financial period:
These errors are called the errors of previous years, and the impact of the error has extended from the period in which the error occurred to the current period, and methods of addressing them will be addressed in the next lesson.
Fourth, the types of errors in terms of where they occur:
In this case, the correction process will be easy and will not have an impact on the financial statements at the end of the period.
Errors that occurred in previous periods and were discovered in the current financial period:
These errors are called the errors of previous years, and the impact of the error has extended from the period in which the error occurred to the current period, and methods of addressing them will be addressed in the next lesson.
Fourth, the types of errors in terms of where they occur:
Errors occur at the stage of recording in the journal:
These errors may occur when a complete financial transaction or one of its parties is not registered, or when one of the two parties to the entry has nothing to do with the financial transaction that took place.
Errors that occur at the stage of posting and balancing in the ledger:
These errors may occur as a result of not posting the financial transaction or one of its parties to the ledger, or that the transaction is posted to an account that has nothing to do with the financial transaction that took place, or that the error is when the account is credited
Errors that occur at the stage of preparing the trial balance:
These are the errors that may occur when the balances of the accounts shown in the ledger are not transferred correctly when preparing the trial balance.
Errors occur at the stage of preparing the inventory settlement entries:
These errors may occur when accounting principles are not adhered to when recording inventory adjustment entries.
Errors occur at the stage of preparing the financial statements:
These errors may occur as a result of the incorrect classification of the items of the financial position statement, or as a result of an error in transferring account balances from the trial balance, or otherwise.
Methods of detecting accounting errors
Accounting errors can be discovered in several ways:
These errors may occur when a complete financial transaction or one of its parties is not registered, or when one of the two parties to the entry has nothing to do with the financial transaction that took place.
Errors that occur at the stage of posting and balancing in the ledger:
These errors may occur as a result of not posting the financial transaction or one of its parties to the ledger, or that the transaction is posted to an account that has nothing to do with the financial transaction that took place, or that the error is when the account is credited
Errors that occur at the stage of preparing the trial balance:
These are the errors that may occur when the balances of the accounts shown in the ledger are not transferred correctly when preparing the trial balance.
Errors occur at the stage of preparing the inventory settlement entries:
These errors may occur when accounting principles are not adhered to when recording inventory adjustment entries.
Errors occur at the stage of preparing the financial statements:
These errors may occur as a result of the incorrect classification of the items of the financial position statement, or as a result of an error in transferring account balances from the trial balance, or otherwise.
Methods of detecting accounting errors
Accounting errors can be discovered in several ways:
Auditing of accounts by the accountant or one of the accountants.
When the external auditor or the tax officer performs the audit.
When the trial balance is imbalanced.
When the sum of the values of the debit parties is not equal to the sum of the values of the credit parties in the journal.
When the total balances in the auxiliary ledgers are not equal to the balance shown in the general ledger of one of the accounts.
When making a bank settlement, by comparing the balance shown in the bank with the balance shown in the books.
When matching statements received from debtors and creditors with their accounts recorded in the books.
By accident.
When the external auditor or the tax officer performs the audit.
When the trial balance is imbalanced.
When the sum of the values of the debit parties is not equal to the sum of the values of the credit parties in the journal.
When the total balances in the auxiliary ledgers are not equal to the balance shown in the general ledger of one of the accounts.
When making a bank settlement, by comparing the balance shown in the bank with the balance shown in the books.
When matching statements received from debtors and creditors with their accounts recorded in the books.
By accident.
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