Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes: Correcting Errors

  • Errors are not uncommon in accounting processes
  • Often these errors are discovered and revealed at a later date than on the date they were made
  • Errors should not be corrected by tearing/cancelling out the wrong number or similar methods
  • Instead they are corrected by making Journal entries
  • Examination and exercise questions will ask you to correct given errors by:
    1. Showing corrections by means of journal entries
    2. Showing the corrections in the double entry set of accounts, by posting these journal entries to the ledger accounts affected
  • Take care to only do as much as you are asked to do and no more
  • For example do not show double entry accounts when you are asked to show only journal entries

Entries to correct errors in the accounts

Error of omission

  • For example the sale of goods, $125 to E Gore, has been completely omitted from the books. We must correct this by entering the sale in the books. The following Journal Entries and corresponding will correct this error:
Journal/General Journal
31 DecemberE Gore125
Being the record of Sales Invoice No: 134 which had been omitted from the books
DRDebtor's LedgerCR
E Gore Account
31 DecemberSales125
General Ledger
DateDetailsAmount($)Sales AccountDateDetailsAmount($)
31 DecemberE Gore125

Error of Commission

  • A purchase of goods, $54 from C Sango, was entered in error in C Senge’s account. To correct this, the purchase must be cancelled out of C Senge’s account, and then entered where it should be in C Sango’s account. The entries required to correct this are as follows:
Journal/General Journal
31 DecemberC Senge54
C Sango54
Being the record of Purchase Invoice No: 12 which had been entered into the wrong personal account
DRCreditor's LedgerCR
C Senge Account
31 DecemberC Sango54
C Sango Account
31 DecemberC Senge54

Error of Principle

  • The purchase of a machine, $200, is debited to the purchases account instead of being debited to
    a machinery account. We therefore cancel the item out of the purchases account by crediting that
    account. It is then entered where it should have been entered by debiting the machinery account. The following entries show the correction:
Journal/General Journal
31 DecemberMachinery Account200
Purchases Account200
Correction of error: purchase of fixed asset debited to purchases account
DRGeneral Ledger LedgerCR
Machinery Account
31 DecemberPurchases200
Purchases Account
31 DecemberMachinery200

Compensating Errors

  • The sales account is overcast by $250, as also is the wages account. The trial balance therefore still balances. This assumes that these are the only two errors found in the books. It is possible to have three or more compensating errors two one side and one error on another side.
Journal/General Journal
31 DecemberSales Account250
Wages Account250
Correction of overcasts of $250 each in the sales account and the
wages account which compensated for each other
DRGeneral Ledger LedgerCR
Sales Account
31 DecemberWages250
Wages Account
31 DecemberSales200

Error of original entry

  • A sale of $82 to A Sando was entered in the books as $28. I means the Sales Account was understated by $54
    now. The following entries will correct this error:
Journal/General Journal
31 DecemberA Sando Account54
Sales Account54
Correction of error whereby sales were understated by $54
DRDebtor's Ledger CR
A Sando Account
31 DecemberWages54
General Ledger
Sales Account
31 DecemberSales54

Complete reversal of entries

  • A payment of cash of $45 to M Danda was entered on the receipts side of the Cash Book in error and credited to M Danda’s account. These errors are a little tricky to correct.
  • First need to make entries to cancel out the error, Debit M Danda and Credit Cash with $45
  • Then comes the actual entry that must have been made: Debit M Danda and Credit Cash with $45
  • A shorthand way of recording this is to multiply the amounts recorded by two: Debit M Danda with $90 and Credit Cash with $90
Journal/General Journal
31 DecemberM Danda Account90
Cash Account90
Payment of cash $90 debited to cash and credited to
M Danda in error Error now corrected
DRCash BookCR
Cash Account
31 DecemberM Danda90
Creditor's Ledger
M Danda's Account
31 DecemberCash90


  • Transposition errors are no for the most part no different from errors of original entries so the same entries will correct them
  • We are assuming that the errors are discovered on 31 December so correcting entries are made on that day
  • You can see an example of a worked question here

To access more topics go to the Cambridge IGCSE Accounting(0452)/O Level Principles of Accounts(7110) Notes.