Errors and corrections to accounting records and financial statements

Question 1

What is a transposition error?

Answer 1

two digits in an amount are accidentally recorded the wrong way round

Question 2

What is an error of omission

Answer 2

transaction is completely omitted, so neither a debit or credit is made

Question 3

What is an error of principle

Answer 3

breaks the rules of accounting principle, when a revenue expenditure is treated as a capital expenditure

Question 4

What is an error of commission?

Answer 4

error is made in the ledger accounts, putting a debit or credit in the wrong account or casting errors