Question

describe the procedures for correcting errors in accounting records. provide an example

Answer 1

In the accounting records, if an error happens it can be rectified only by reversing the error but not by erasing the error. This type of proceedure is followed inorder to ensure the control in accounting records.

For example, the entry for cash payment to party A is debiting A and crediting cash. But if the entry is passed as debiting cash and crediting A, then this error is rectified by passing a reverse entry. And after that, the correct entry will be passed.