What is Rectification of Errors? Meaning, Features, and More.

हिन्दी में पढ़ें:

In a business, transactions are managed by the accounting process which includes identifying the transactions, measuring the currency of the transactions, recording the transactions, classifying the transactions, etc., and while performing these processes many times mistakes are committed which are called accounting errors and the correction of these errors is called rectification of errors.

Before rectifying the errors, the errors are classified so that they can be corrected accordingly. Note: Any error can be corrected at any time, it is not necessary to wait till the trial balance is prepared. The sooner it is corrected the better as it may cause problems later.

What is Rectification of Errors?

The correction of errors is called rectification of errors, and it also involves identification of errors. Errors can be corrected by journal entry, ledger account, etc., but which method to use depends entirely on the nature of the error. Suspense account can also be used in rectification of errors if there is any doubt about the transaction.

To make the correction of errors easier, errors are first classified into different parts such as error of principle, error of commission, error of omission, compensating error, etc. When the type of errors is known, they are corrected accordingly. Errors can be detected in the trial balance, balance sheet, etc., but there are many errors in them that cannot be detected.

Example of Rectification of Errors

Example: A building of Rs 100000 was purchased through the bank, which has been recorded in the purchase book.

Wrong Entry:

• The above entry is wrong because the building is an asset, and the asset does not come under purchase because trading transactions of assets are not done, but the bank’s entry is correct.

Correct Entry:

Rectifying entry:

• The purchase account was debited which would have to be credited to reverse and the building account was not debited, it would have to debit, the entry of the bank account was correct, so there would be no change in it.

Features of Rectification of Errors

Following are the features of rectification of errors:

1. Correction:

In this, errors are corrected and to correct the errors, first, the errors are identified such as what type of error it is and how it can be corrected. When information about the error is obtained, it is corrected accordingly.

2. Process:

It is a process of rectifying errors and includes all the work from identifying the errors to rectifying them. In this, errors are rectified according to their nature. For example, by passing reverse entry, passing new entry, etc.

3. Correct Result:

It is used in accounting to get the correct results because if there is any error in the accounting process then the correct results are not obtained like financial statement is not prepared correctly, etc. The decisions taken in the business can also be wrong due to wrong reports.

4. Continuous:

It is a continuous process because it is used every time an error occurs. This process starts when an error occurs and continues until the error is corrected and is used as many times as the error occurs.

5. Classified:

Rectification of errors is classified in the same way as errors are classified because errors are to be corrected according to the type of error. For example, the rectification of errors of principle, the rectification of errors of omission, the rectification of errors of commission, the rectification of compensating errors, etc.

Read Also:

• What are Accounting Errors? Meaning, Features, and More.
• Classification of Accounting Errors
• Importance of Rectification of Errors
• How to rectify accounting errors?
• What is a Suspense Account? Meaning, Features, and More.

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