Like other professionals, bookkeepers and accountants can make mistakes. \u00a0The difference is that these mistakes might direct you and your company to make the wrong business decisions and have you headed in the wrong direction.<\/p>\n
In order to avoid or correct such mistakes, you must first know is how to detect them. After detecting specific mistakes, you should know which methods to use to correct those mistakes. Here are the most common accounting mistakes and few helpful tips to hope you fix such errors and mistakes.<\/p>\n
Most Common Accounting Mistakes and Errors<\/strong><\/p>\n Transposition Error: <\/strong><\/b>This type of error takes place when the accountant \u2013 or the system \u2013 reverses or transposes<\/em><\/i> numbers. For instance, the number 49 is written 94. This error can be easily corrected by simply double checking specific data entries.<\/p>\n Error of Principle:<\/strong><\/b> This error occurs when a specific transaction is registered against accepted principles of accounting. Examples of this type of error include, fixed assets that gets expensed instead of getting capitalized or the recording of capital contributions as loans or the recording personal expenses as business expenses.<\/p>\n Error of Omission:<\/strong><\/b> This error happens when a transaction is missed partially or wholly. In this situation, the entry is overlooked or forgotten. \u00a0Examples include, forgetting to record a specific entry, failure to record expenses, or not mentioning\/documenting an adjustment to a specific inventory item.<\/p>\n Error of Commission:<\/strong><\/b> This type of error implies an incorrect entry was posted. \u00a0 Examples include, recorded the incorrect amount to the correct account \u2013 it\u2019s in the right place but the wrong amount; calculation error \u2013 the amount totaled or calculated is incorrect; reversal of entries \u00a0\u2013 the amount is correct but it was debited when it should have been credited or vice versa; or compensating errors \u2013 two errors of the same amount that leave the books balanced.<\/p>\n Knowing the types of errors and mistakes that can be made is just half the battle. \u00a0What do you do when you find one of these?<\/p>\n This is a guest post by Ricky Palermo, full-time employee at an accounting company and occasional guest blogger on accounting, SEO, and careers. <\/p>\n","protected":false},"excerpt":{"rendered":" Like other professionals, bookkeepers and accountants can make mistakes. \u00a0The difference is that these mistakes might direct you and your company to make the wrong …<\/p>\n","protected":false},"author":2,"featured_media":245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"yoast_head":"\n