AccountsISC Class 11 · Rectification of Errors

Types of Errors and Two-sided Rectification: ISC Class 11 Accounts

Updated 17 October 2026 · Fact-checked

Errors in bookkeeping are of omission, commission, principle and compensation. Two-sided errors affect two accounts and do not disturb the agreement of the trial balance; they are rectified by cancelling the wrong entry and passing the right one, usually in a single journal entry in the journal proper: debit the account that should have been debited and credit the account that should have been credited.

Move the debit from the wrong account to the right one in a single entry; both sides change equally, so the trial balance still agrees.

Illustration drawn for QuestionBuddy.

Understand Types of Errors and Rectification of Two-sided Errors

Types of errors.

*Errors of omission:* a transaction is omitted wholly (complete omission, no effect on trial balance) or partly (one-sided, trial balance disagrees).
*Errors of commission:* mistakes in recording or posting: wrong amount, wrong account (same class), wrong side, wrong totalling or carry-forward.
*Errors of principle:* wrong treatment of capital as revenue or vice versa, such as purchase of an asset debited to Purchases.
*Compensating errors:* two or more errors that cancel each other's effect on the trial balance (an overcast of 1,000 on one debit and an undercast of 1,000 on another).

Two-sided errors affect the debit and credit equally; the trial balance still agrees. Examples: wrong account debited (Mohan for Mohit), wrong amount posted on both sides, principle errors, complete omission.

Rectification methods. (1) Identify the entry made. (2) Identify the correct entry. (3) Cancel the wrong entry by reversing it and pass the correct entry; the net rectifying entry usually involves only the accounts that differ.

Rectifying before the trial balance and within the same year is done by direct correction in the books or by a rectifying journal entry; after the trial balance the rectification is made in the journal proper.

Examples.

Goods sold to Ravi Rs 5,000 entered in Rajiv's account (wrong person): Ravi Dr 5,000, To Rajiv 5,000.
Machinery purchased for Rs 20,000 debited to Purchases: Machinery Dr 20,000, To Purchases 20,000.
Wages paid Rs 3,000 debited to Rent: Wages Dr 3,000, To Rent 3,000.
Credit sale of goods to Mohan Rs 8,000 entirely omitted: Mohan Dr 8,000, To Sales 8,000.

Effect on profit. Profit changes only if the error shifts an amount between a nominal account and a personal or real account, so that income or expense is wrongly stated. An error between two nominal accounts, or between two personal or real accounts, does not change profit.

Types of Errors and Rectification of Two-sided Errors: key facts

Rectification rule: Rectifying entry = Correct entry - Wrong entry | Debit and credit the accounts that differ; Net effect.
Trial balance effect: Two-sided errors: no effect | One-sided errors: totals differ; Agreement test.
Profit effect: Corrected profit = Reported profit + Understatements of profit (overstated expenses, understated incomes) - Overstatements of profit (understated expenses, overstated incomes); Errors between two nominal accounts, or two personal/real accounts, leave profit unchanged.

How to answer Types of Errors and Rectification of Two-sided Errors questions

Write the wrong entry, the right entry and their difference.

1State the wrong entry that was made.
2State what it should have been.
3Reverse the wrong part and add the correct part.
4Write the rectifying entry with narration and check the profit effect.

Types of Errors and Rectification of Two-sided Errors in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Principle error

Suppose a salon buys a hair-dryer for Rs 4,000 and the bookkeeper debits it to Repairs.

What is the error and its effect on profit?

Try it first, then show the solutionSolution

The hair-dryer is an asset (capital expenditure), not an expense.
Repairs were overstated by Rs 4,000, so profit is understated by Rs 4,000.

Answer: Rectify: Equipment Dr 4,000, To Repairs 4,000; profit increases by Rs 4,000.

Memory hook: Capital not revenue: move it to the asset.

Tricks to remember Types of Errors and Rectification of Two-sided Errors

Short memory aids. Say each one aloud once, then use it on a question the same day.

O-C-P-C
Omission, Commission, Principle, Compensating.
Use it when: Four kinds.
Two-sided = TB agrees
If both sides are affected equally, the trial balance does not warn you.
Use it when: Detection.
Cancel and replace
Reverse the wrong entry and pass the right one.
Use it when: Rectification.

Types of Errors and Rectification of Two-sided Errors: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Identify the error · 1 mark · MCQBoard level

Purchase of furniture debited to the Purchases account is an error of:
(a) omission (b) principle (c) compensation (d) transposition

Try it first, then show the solutionSolution

Capital expenditure was treated as revenue: error of principle.

Answer: (b) principle

Example 2: Classify the errors · 4 marks · Short answerBoard level

Classify each error: (i) credit sale of Rs 6,000 not recorded at all; (ii) rent paid debited to wages account; (iii) a debit overcast by Rs 500 offset by a credit overcast by Rs 500; (iv) office furniture bought debited to Repairs. (4 marks)

Try it first, then show the solutionSolution

(i) Complete omission.
(ii) Commission (wrong account).
(iii) Compensating.
(iv) Principle.

Answer: (i) omission; (ii) commission; (iii) compensating; (iv) principle.

Example 3: Rectifying entries · 7 marks · Long answerHarder board level

Pass rectifying entries: (a) Goods sold to Kunal Rs 7,500 were debited to Kapil. (b) Salary of Rs 12,000 paid to the owner was debited to Salaries. (c) Rs 25,000 for a new printer debited to Printing. (d) Goods purchased on credit from Leela, Rs 9,000, were omitted entirely. (e) Cash received from Meena Rs 4,000 was credited to Meera. (7 marks)

Try it first, then show the solutionSolution

(a) Kunal Dr 7,500, To Kapil 7,500.
(b) Drawings Dr 12,000, To Salaries 12,000.
(c) Printer Dr 25,000, To Printing 25,000.
(d) Purchases Dr 9,000, To Leela 9,000.
(e) Meera Dr 4,000, To Meena 4,000.

Answer: Entries as listed in the steps.

Example 4: Effect on profit · 6 marks · Long answerHarder board level

Profit before correction is Rs 82,000. Corrections: (i) printer Rs 25,000 debited to Printing, depreciation 10% to be charged for the full year; (ii) owner's salary Rs 12,000 debited to Salaries; (iii) credit purchase omitted Rs 9,000, its goods are all sold. Find the corrected profit. (6 marks)

Try it first, then show the solutionSolution

(i) Add back 25,000; charge depreciation 2,500: net +22,500.
(ii) Add back 12,000.
(iii) Omitted purchases of 9,000 raise cost: -9,000.
Corrected profit = 82,000 + 22,500 + 12,000 - 9,000 = Rs 1,07,500.

Answer: Corrected profit Rs 1,07,500.

Example 5: Compensating errors · 4 marks · Short answerHOTS / competency

The trial balance agrees, but a check shows that the Sales account was overcast by Rs 2,000 and the Rent account was overcast by Rs 2,000 (debit). Show the corrected profit if profit was Rs 70,000 and explain why the trial balance agreed. (4 marks)

Try it first, then show the solutionSolution

Sales overcast: credit too high by 2,000, so profit overstated by 2,000.
Rent overcast: debit too high by 2,000, so profit understated by 2,000.
The errors cancel in the trial balance and in profit: corrected profit = 70,000 - 2,000 + 2,000 = Rs 70,000.

Answer: The trial balance agreed because the errors offset each other; corrected profit remains Rs 70,000 (the individual accounts are corrected).

Where students lose marks in Types of Errors and Rectification of Two-sided Errors

The slips examiners see most often, and what to write instead.

Mistake: Debiting the wrong account in the rectification
Not tracing the original entry.
Wrong working
Kapil Dr, To Kunal
Right working
Kunal Dr, To Kapil
Do this: Reverse the wrong, then add the right.
Usually costs: 2 marks.
Mistake: Forgetting depreciation after capitalising
Stopping at the entry.
Wrong working
Add back 25,000
Right working
Add back 25,000 less depreciation 2,500
Do this: Charge depreciation on capitalised items.
Usually costs: 1-2 marks.
Mistake: Treating personal salary as expense
Reading "salary" literally.
Wrong working
Salaries Dr
Right working
Drawings Dr
Do this: Owner's payment is drawings.
Usually costs: 1-2 marks.

Exam tips

Always give a one-line narration.
State which accounts were wrongly debited or credited.
Note if profit changes and by how much.

Practice questions on Types of Errors and Rectification of Two-sided Errors

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Which of these errors will make the trial balance totals disagree?
(a) a credit sale posted to the wrong customer (b) cash received credited to the party but not debited to Cash (c) an asset debited to Purchases (d) equal compensating overcasts
Hint
Only one side posted.
Answer
(b) cash received credited to the party but not debited to Cash
Q2 · 3 marks · Short answerBoard level
Distinguish between errors of omission and errors of commission with examples. (3 marks)
Hint
Not recorded versus recorded wrongly.
Answer
Omission: the transaction is not recorded (a credit sale left out). Commission: recorded or posted wrongly (Rs 5,000 posted to the wrong customer).
Q3 · 5 marks · Long answerHarder board level
Pass rectifying entries: (a) Rs 6,500 paid for repairs to the owner's house debited to Repairs; (b) Purchase of a delivery van for Rs 90,000 debited to Purchases; (c) Sale of goods Rs 14,000 to Naina posted to Nisha's account; (d) Rs 3,200 interest received credited to Commission. (5 marks)
Hint
Four entries.
Answer
(a) Drawings Dr 6,500, To Repairs 6,500; (b) Delivery van Dr 90,000, To Purchases 90,000; (c) Naina Dr 14,000, To Nisha 14,000; (d) Commission Dr 3,200, To Interest received 3,200.
Q4 · 6 marks · Long answerHarder board level
Profit was Rs 1,45,000. Errors: wages for installing a machine, Rs 8,000, debited to Wages (charge 10% depreciation for the full year); drawings of Rs 5,000 debited to Rent; goods worth Rs 3,000 given as free samples debited to Purchases. Find the corrected profit. (6 marks)
Hint
Free samples: already inside costs.
Answer
Machine: add back 8,000, charge 800: +7,200. Drawings: +5,000. Free samples: reclassify from Purchases to Advertisement; net profit unchanged (but gross profit rises by 3,000 and expenses by 3,000). Corrected profit = 1,45,000 + 7,200 + 5,000 = Rs 1,57,200.
Q5 · 3 marks · Short answerHOTS / competency
A trial balance agrees even though several errors exist. Explain two reasons why a balancing trial balance does not prove that the books are correct, giving an example of each. (3 marks)
Hint
Which errors do not disturb totals?
Answer
Errors of principle and compensating errors do not disturb the totals. Example: an asset debited to Purchases, and equal overcasts on a debit and a credit account.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Four types of errors?Show answer
Omission, commission, principle, compensating.
2.Do two-sided errors affect the trial balance?Show answer
No.
3.Rectify wrong account debit how?Show answer
Debit correct, credit wrong.
4.Owner's salary goes to?Show answer
Drawings.
5.Error of principle example?Show answer
Asset debited to purchases.

Types of Errors and Rectification of Two-sided Errors: frequently asked questions

Can an error affect profit without affecting the trial balance?

Yes, if the error is between a nominal account and a personal or real account (for example, an asset debited to Purchases). An error between two nominal accounts does not change profit.

Is rectification always by journal?

After the books are closed, yes, through the journal proper.

What if the error is found next year?

Two-sided errors found after the accounts are closed are rectified through the journal proper. Where a nominal account is involved, the Profit and Loss Adjustment Account is used. The Suspense Account applies only to one-sided errors.

Are compensating errors detectable?

Only by checking accounts individually.