1. This error is not shown in the Balance Sheet. This means that the Balance Sheet is still balanced even if the error exists in the accounting book.
2. All mistakes are corrected through general journal entries.
Type of Errors
a. Missed Error
This error occurs when a single transaction is not recorded in any book. No account is debited and no account is credited.
b. Principle Mistakes
This error occurs when a transaction is recorded in the wrong account type. For example, capital expenditure items are recorded as revenue outcomes and vice versa.
c. Amount Error
This mistake happens when the wrong amount is noted on the debit side and on the credit side.
d. Off-balance Mistakes
This mistake happens when a mistake in debit balances is offset by the same mistake in the amount of credit.
e. Commission Error
This error occurs when a transaction is recorded in the wrong person account.
f. Reverse Error
This error occurs when a double entry has been published even if it is posted in two correct accounts