Correction of Errors
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MS: Pembetulan Kesilapan · EN: Correction of Errors · ZH: 错误更正
Meaning
Correction of errors is the process of fixing accounting mistakes that occur when transactions are recorded in the books of prime entry or the ledger. It is carried out through general journal entries, and for errors that affect the trial balance it involves a suspense account. The aim is to ensure the accounting records and financial statements show a true and fair view.
Example
For example, Maju Jaya Enterprise wrongly recorded a purchase of RM500 as RM50. The correction is made through a general journal entry adding RM450 to the Purchases Account so that the actual amount of RM500 is recorded.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 4