4 Financial Accounting · 4.4 Final accounts, errors and rectification

4.4.2 Errors and their rectification, and the suspense account

Errors are classified as omission, commission, principle and compensating; those that disturb the trial balance are parked in a suspense account and cleared by rectifying entries, each of which may change the profit.

  • APPSC Paper I
  • Advanced level
  • 8 min read
  • Full course

Key terms

  • errors
  • rectification
  • error of omission
  • error of commission
  • error of principle
  • compensating errors
  • one-sided error
  • two-sided error
  • suspense account
  • trial balance
  • profit and loss adjustment account
  • effect on profit

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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