Meaning of Rectification of Error
Rectification of Error means to improvement of all type mistakes in the books of accounts and financial statements which affects one account or both account. Main aim of rectification of errors to show correct financial statements.
Steps of Rectification of Error
1st Step : Find the Mistakes
2nd Step : Write Mistake
3rd Step : Write the Correct Journal Entry or Account or Amount which Affects one account or both account
4th Step : Write Rectify Journal Entry or Account
Example
suppose you wrote Rs. 1000 as sake instead of RS.2000 sale which was correct .
Its wrong is journal entry is
cash account Dr. 1000
To Sale account 1000
In rough paper you should also write correct journal entry
Cash account Dr. 2000
To sale account 2000
Then now your are analyst you should see that 1000 is less in both side so for making the correctness pass another journal entry of Rs. 1000
Cash account Dr. 1000
To Sale Account 1000
This entry is called rectify entry .
Get Accounting course at https://www.krantikari.org/2017/01/online-accounting-course.html Get our ebook
