Topics
Introduction to Book-Keeping and Accountancy
- Accounting
- Book-Keeping
- Accountancy
- Book-Keeping vs. Accountancy
- Basis (Methods) of Accounting System
- Qualitative Characteristics of Accounting Information
- Basic Terms in Accounting
- Transaction
- Capital and Drawings
- Debtors, Creditors and Bad Debts
- Expenditure and Its Types
- Discount and Its Types
- Solvent Person vs. Insolvent Person
- Accounting Year
- Trading Concerns vs. Not for Profit Concerns
- Concept of Goodwill
- Fundamentals of Business Earnings
- Concepts of Assets, Liabilities and Net Worth
- Accounting Principles
- Accounting Concepts
- Core Accounting Concepts
- Accounting Standards
Meaning and Fundamentals of Double Entry Book-Keeping
Journal
- Accounting Documents
- Goods and Service Tax(GST)
- Types of Accounting Documents
- Voucher
- Tax Invoice (Under GST)
- Credit Memo
- Receipt
- Cheque
- Types of Cheques
- Books of Accounts
- Books of Accounts > Journal
- Journal Entries
- Journal Entries > Goods Account
- Journal Entries > Recording Discount in Journal
- Journal Entries > Other Important Journal Entries
Ledger
Subsidiary Books
- Concept of Subsidiary Books
- Cash Book
- Cash Book > Simple Cash Book (Single Column Cash Book)
- Cash Book > Two Column Cash Book (With Cash and Bank Columns)
- Cash Book > Petty Cash Book
- Simple Petty Cash Book
- Analytical Petty Cash Book
- Purchase Book
- Purchase Return Book
- Sales Book
- Sales Return Book
- Journal Proper
Bank Reconciliation Statement
- Accounting Documents Used in Banking
- Accounting Documents Used in Banking
- Pay-in-Slip
- Withdrawal Slip
- Bank Pass Book
- Bank Statement
- Bank Advice
- Concept of Virtual Banking
- Bank Reconciliation Statement(BRS)
- Cash Book vs Pass Book : Causes of Differences
- Time Difference(Regarding BRS)
- Errors and Omission Made by Bank or Businessman
- Formats of BRS
- Preparation of BRS
- Cash Book and Pass Book Comparison for Common Period
- Cash Book and Pass Book Balances for Different Periods
- Bank Balance as per Cash Book (Favourable / Debit Balance)
- Bank Balance as per Pass Book (Favourable / Credit Balance)
- Overdraft as per Cash Book (Unfavourable / Credit Balance)
- Overdraft as per Pass Book (Unfavourable/Debit balance)
- Reconciliation of Debtors and Creditors
Depreciation
Rectification of Errors
Final Accounts of a Proprietary Concern
Single Entry System
- Concept of Single Entry System
- Single Entry System vs. Double Entry System
- Parts of Single Entry System
- Statements of Affairs
- Statement of Profit or Loss
- Statement of Profit or Loss > Net Worth Method
- Practical Problems on Single Entry System
- Overview
- Examples: Errors of Omission
- Examples: Errors of Commission
- Examples: Errors of Principle
- Examples: Compensating Errors
- One-Sided Errors vs. Two-Sided Errors
- Classification of One-Sided and Two-Sided Errors
- Key Takeaways
Maharashtra State Board: Class 11
Overview
Maharashtra State Board: Class 11
Examples : Errors of Omission
| Subtype | Description | Example | Effect |
|---|---|---|---|
| Complete Omission | Transaction missed completely in all books | The credit purchase from Deepak is not recorded at all | Doesn't affect trial balance |
| Partial Omission | Recorded in one book, missing in another | Credit sales to Raj entered in Sales Book but not posted to Raj's A/c | Does affect trial balance |
Maharashtra State Board: Class 11
Examples : Errors of Commission
| Subtype | Example | Effect |
|---|---|---|
| Wrong recording | Goods bought for ₹1,000 entered as ₹10,000 in purchase book | Doesn't affect trial balance |
| Wrong total | The sales book total taken as ₹50,000 instead of ₹5,00,000 | Affects trial balance |
| Wrong posting | Sale to Rohan of ₹900 posted to credit instead of debit | Affects trial balance |
Maharashtra State Board: Class 11
Examples : Errors of Principle
| Example | Explanation | Effect |
|---|---|---|
| Freight for fixed asset charged to Freight Account | The concerned asset account should be debited | Doesn't affect trial balance |
| Repairs of ₹500 posted to Machinery account | The repairs account should be debited | Doesn't affect trial balance |
Maharashtra State Board: Class 11
Examples : Compensating Errors
| Example | What Happens | Effect |
|---|---|---|
| Over-posting debit in Deepak’s A/c and matching under-posting credit in Sunil’s A/c | Both errors cancel in trial balance | Doesn't affect trial balance |
Maharashtra State Board: Class 11
One-Sided Errors vs.Two-Sided Errors
| Basis of Comparison | One-Sided Errors | Two-Sided Errors |
|---|---|---|
| Meaning | Affect only one account, either debit or credit side | Affect two or more accounts on both debit and credit sides |
| Effect on Trial Balance | Cause disagreement in the trial balance | Do not affect the trial balance totals |
| Rectification Method | Corrected by adjusting the affected account directly, or via Suspense Account if after trial balance | Corrected by passing a proper journal entry between the affected accounts |
| Suspense Account Use | Used when trial balance does not tally due to one-sided errors | Not used, as these errors do not disturb the trial balance |
| Time of Correction | Noted by additional posting on debit or credit of one ledger account | Rectified through Journal Proper with debit–credit adjustment |
What is a Suspense Account?
A suspense account is a temporary account used to record uncertain or unclassified transactions until the correct account is identified.
Maharashtra State Board: Class 11
Classification of One-Sided and Two-Sided Errors
| Type of Error | Classification (One-Sided / Two-Sided) |
|---|---|
| Error of Omission |
|
| Error of Commission | One-Sided Error |
| Error of Principle | Two-Sided Error |
| Compensating Error | Two-Sided Error |
Maharashtra State Board: Class 11
Key Takeaways
- Accounting errors are mistakes made during journalizing, posting, or totaling transactions, often classified into one-sided and two-sided types.
- One-sided errors affect only one account (like partial omission or totalling mistakes) and cause a trial balance difference, usually corrected through the suspense account before final statements.
- Two-sided errors, such as principles, complete omissions, or compensating errors, affect two or more accounts but balance both sides equally, leaving the trial balance unaffected and rectified through journal entries.
- Errors of omission involve missed entries
- Commission errors arise from wrong postings or amounts
- Principle errors break accounting rules by misclassifying items
- Compensating errors cancel each other out.
