How To Fix An Accounting Error

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How To Fix An Accounting Error
How To Fix An Accounting Error

Video: How To Fix An Accounting Error

Video: How To Fix An Accounting Error
Video: How to Account for Accounting Errors 2024, March
Anonim

In the accounting statements, there are typos, inaccuracies in calculations, errors that occurred as a result of software malfunctions or caused by the incompetence of an employee. In this regard, business transactions are reflected inaccurately, the reporting may be distorted. Errors made in accounting and their consequences are subject to mandatory correction.

How to fix an accounting error
How to fix an accounting error

It is necessary

  • Knowledge of error correction methods, namely:
  • 1. "Reverse": the incorrect entry is duplicated with a "minus" sign (highlighted in red), then the correct posting is performed.
  • 2. "Additional entries": if the business transaction is reflected in a smaller amount, but the corresponding accounts are indicated correctly, then an additional posting is made with the same correspondence of accounts for an amount equal to the difference between correct and incorrect.

Instructions

Step 1

How errors are corrected depends on when the errors are detected and how significant they are. You should classify the detected error as one of the following types: - significant and insignificant errors of the reporting year, which were discovered before the end of this year;

- significant and insignificant errors of the reporting year, which were discovered after the end of this year;

- significant errors of the previous reporting year, which were discovered after the date of signing the financial statements for this year, but before the date of submission of such statements;

- significant errors of the previous reporting year, which were discovered after the submission of financial statements for this year, but before the approval of such statements in accordance with the procedure established by the legislation of the Russian Federation;

- significant errors of the previous reporting year, which were discovered after the approval of the financial statements for this year;

- insignificant errors of the previous reporting year, which were discovered after the date of signing the accounting statements for that year.

Step 2

Correct the error of the current year before the end of the year. Make an entry on the corresponding accounting accounts in the month in which the error was detected using the "reversal" or "reverse" postings method.

Step 3

Correct the current year error found after the end of the year, as well as the error found before the reporting date or before the reporting date. Do this in the same way as in Step 2, but in the December report of the past year.

Step 4

Correct the last year's error that was discovered after the last year's financial statements were approved. Make entries for the relevant accounting accounts in the current current reporting period.

Step 5

Correct a minor error identified after the date of signing the financial statements. Make entries for the relevant accounting accounts in the month of the reporting year in which the minor error was identified.

Step 6

Prepare an accounting statement for the annual financial statements. In the certificate, explain the nature of material errors corrected in the reporting period, the amount of the adjustment for each item in the financial statements, the amount of the adjustment of the opening balance of the earliest of the presented reporting periods.

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