Page 287 - Accountancy_F5

The following Table 9.1 outlines the different types of errors that can occur at various
stages of the accounting process.

Table 9. 1: Types of errors in different stages of accounting process

Stage Types of Errors
FOR ONLINE READING ONLY
(i) Recording stage • Recording incorrect amount
• Recording incorrect transaction details
• Omission of a transaction
(ii) Posting stage • Posting to incorrect account
• Posting on the wrong side of an account
LANGUAGE EDITING
• Posting incorrect amount
(iii) Balancing stage • Incorrect totaling
• Incorrect balancing
(iv) Preparation of trial • Taking incorrect amount
balance • Taking incorrect account
• Taking account balance to the wrong side of trial

balance

At the end of the accounting period, a trial balance is prepared to verify the arithmetical
accuracy of the accounts. If the trial balance does not balance, it implies that there are
arithmetical errors in the accounts that require detection and correction. However, even
if the trial balance agrees, there may still be some errors. These errors might be difficult
to detect and their detection may occur by chance or during the auditing process.

A better understanding of errors can further be achieved by distinguishing them from
frauds. Table 9.2 highlights the key differences between errors and frauds, taking into
account the presence or absence of intention, motives, and objectives behind their
occurrence.

Student’s Book Form Five
274

23/06/2024 17:36
ACCOUNTANCY_DUMMY_23 JUNE.indd 274 23/06/2024 17:36
ACCOUNTANCY_DUMMY_23 JUNE.indd 274