Page 28 - IC26 LIFE INSURANCE FINANCE

3. Stages of rectification

(1) Before preparation of Trial Balance

(i) Error of Principle : This error will be rectified through a journal entry.

Example : Purchase of Machinery for rs.20000 has been entered in the Purchase Book

Rectifying Entry - Machinery A/c Dr.
2000

To Purchase A/c - 2,000

(ii) Errors of omission

(a) Error of Complete omission: In this case rectification will take place by a Journal entry of
that transaction which was omitted to be recorded earlier.

(b) Error of partial omission : I n this case rectification will be made by a rectification
statement in the appropriate side of concerned account.

(iii) Error of Commission

(a) Taking wrong account : This error is rectified through a Journal Entry.

Example : Rs. 100 received from Krishan has been credited to Krishnan

Rectifying Entry - Krishnan A/c Dr. 100

To Krishan A/c 100

(b) Taking wrong amount: This error is rectified through appropriate rectification statement
in respective account.

(c) Taking to the wrong side: This error is also rectified through a rectification statement.

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