From the course: Advanced Bookkeeping Techniques
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Error correction: Increasing or decreasing the amount
From the course: Advanced Bookkeeping Techniques
Error correction: Increasing or decreasing the amount
- Some errors involve transactions being recorded at the wrong amount. For example, a rent payment for $900 might be mistakenly entered into the accounting system as $90. In addition, in the old days of manual accounting systems, one very common error was the transposition of digits. So the amount of $729 would be mistakenly recorded as $792 with the nine and the two reversed. These transposition errors can still occur whenever human beings input data into a computerized accounting system. Another potential error is that a transaction might not be recorded at all. The $900 rent payment might mistakenly fail to be even included in the accounting records. This can happen quite easily if a business makes payments out of several different bank accounts. Sometimes things might be recorded more than once or worse, things might be paid more than once. That $900 rent payment might be paid once from one company bank account and…
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