Chapter 6 · Lesson 3 of 4 · ⏱ 35 min

Rectifying Errors That Do Not Affect the Trial Balance

🎯 After this lesson you will be able to:

Use the three-step method (what was done, what should have been done, the rectifying entry)
Pass rectification entries for omission, wrong amount, wrong account and wrong book errors
Rectify errors of principle and compensating errors
Apply the guiding assumptions that board questions expect

Finding an error is only half the job. Now we must correct it, and in accounting we never use an eraser or whitener. Instead, we pass a fresh journal entry, called a rectification entry, that cancels the wrong effect and puts in the right one. Today we handle the easier family first: two-sided errors, the ones that do not disturb the trial balance. You will learn one simple three-step method that works for every question, and by the end you will write rectification entries as confidently as ordinary journal entries.

1. Two groups for rectification

For the purpose of correcting them, errors are divided into two groups:

Basis	Errors not affecting the trial balance	Errors affecting the trial balance
Also called	Two-sided errors	One-sided errors
Accounts disturbed	Two or more, by equal amounts	Usually one
How rectified	An ordinary journal entry between the accounts involved	A note in the account, or a journal entry using a Suspense Account (Lesson 4)
Examples	Complete omission, wrong amount in the book of original entry, wrong account on the correct side, wrong book, errors of principle	Wrong casting, wrong posting amount or side, partial omission, wrong balancing

Rectification of errors means correcting errors by (1) cancelling the wrong debit or credit, and (2) restoring the correct debit or credit, through a journal entry (the journal proper is used for this).

Why not just scratch out the wrong figure? Erasing or overwriting makes records look tampered with and gives the impression that something is being hidden. A rectification entry leaves a clear trail: anyone can see what was wrong and how it was fixed. If a mistake in the journal is noticed before posting, it may be corrected by striking it with a single line, writing the correct figure above and initialling it.

2. The three-step method

For every error, write three things (in rough work, and in the exam if space permits):

What was done (the wrong entry, as it actually happened in the books).
What should have been done (the correct entry).
Rectifying entry: compare the two, account by account.

For each account, check its effect:
• Debit the account that has a short debit or an excess credit.
• Credit the account that has an excess debit or a short credit.

Think of each account as a glass that should hold the right amount of water. If it is short on the debit side, pour in (debit). If it has too much debit, pour out (credit). Excess credit is the same as short debit, and vice versa.

3. One transaction, four kinds of mistakes

Sharma Traders sold goods on credit to Neha for ₹8,000 on 6 April 2026. The new trainee made a different mistake each time he tried to record it. Let us rescue him, one mistake at a time.

Credit sales to Neha ₹8,000: (a) were not recorded in the sales book; (b) were recorded in the sales book as ₹800; (c) were recorded in the sales book as ₹8,600; (d) were correctly recorded in the sales book but posted to Nitin’s account. Pass rectification entries.

Correct entry in every case: Neha’s A/c Dr. ₹8,000; To Sales A/c ₹8,000.
(a) Done: nothing. Neha short debit ₹8,000, Sales short credit ₹8,000. Rectify: simply record the transaction now: Neha’s A/c Dr. 8,000; To Sales A/c 8,000. (Complete omission.)
(b) Done: Neha Dr. 800; Sales Cr. 800. Neha short debit ₹7,200, Sales short credit ₹7,200. Rectify: Neha’s A/c Dr. 7,200; To Sales A/c 7,200. (Commission, wrong amount in the book of original entry: all postings followed the wrong ₹800.)
(c) Done: Neha Dr. 8,600; Sales Cr. 8,600. Neha excess debit ₹600, Sales excess credit ₹600. Rectify: Sales A/c Dr. 600; To Neha’s A/c 600.
(d) Done: Nitin Dr. 8,000; Sales Cr. 8,000. Sales is correct. Nitin has an excess debit, Neha a short debit. Rectify: Neha’s A/c Dr. 8,000; To Nitin’s A/c 8,000.

Date	Particulars	Dr (₹)	Cr (₹)
(a)	Neha’s A/c Dr.	8,000
	To Sales A/c		8,000
	(Being credit sales to Neha omitted from the sales book, now recorded)
(b)	Neha’s A/c Dr.	7,200
	To Sales A/c		7,200
	(Being credit sales of ₹8,000 recorded as ₹800, now rectified)
(c)	Sales A/c Dr.	600
	To Neha’s A/c		600
	(Being credit sales of ₹8,000 recorded as ₹8,600, now rectified)
(d)	Neha’s A/c Dr.	8,000
	To Nitin’s A/c		8,000
	(Being credit sales to Neha wrongly debited to Nitin, now rectified)

In (d), students often write “Neha’s A/c Dr. To Sales A/c”. But Sales was already credited correctly; touching it again would credit it twice. Only the wrong accounts appear in a rectification entry. An account that is already correct never appears.

Credit purchases of ₹9,000 from Bansal Traders were not recorded in the purchases book at all. Pass the rectification entry.

Nothing was done, so nothing needs cancelling. Just record the correct entry.

Complete omission: both accounts are untouched, so record the transaction now. The trial balance was not affected, so no suspense account is needed.

Particulars	Dr (₹)	Cr (₹)
Purchases A/c Dr.	9,000
To Bansal Traders’ A/c		9,000
(Being credit purchases omitted from the purchases book, now recorded)

Credit sales to Pooja of ₹15,000 were entered in the sales book as ₹1,500. What amount will appear in the rectification entry (in ₹)?

Both Pooja and Sales received ₹1,500 instead of ₹15,000.

Short debit to Pooja = short credit to Sales = 15,000 − 1,500 = ₹13,500. Entry: Pooja’s A/c Dr. 13,500; To Sales A/c 13,500.

4. Recorded in the wrong book

When a transaction is entered in the wrong subsidiary book, assume that all postings followed that wrong book. The party is posted according to the wrong book, and the book’s total goes to the wrong account.

Credit sales to Kavya ₹6,000 were recorded in the purchases book. Rectify.

Done: the purchases book is posted as Purchases A/c Dr. 6,000 (through the total) and Kavya’s A/c Cr. 6,000 (she is treated as a supplier).
Should be: Kavya’s A/c Dr. 6,000; To Sales A/c 6,000.
Compare: Kavya was credited ₹6,000 instead of being debited ₹6,000, so she needs a debit of 6,000 + 6,000 = ₹12,000. Purchases has an excess debit of ₹6,000 → credit it. Sales has a short credit of ₹6,000 → credit it.

Particulars	Dr (₹)	Cr (₹)
Kavya’s A/c Dr.	12,000
To Purchases A/c		6,000
To Sales A/c		6,000
(Being credit sales to Kavya wrongly recorded in the purchases book, now rectified)

Goods of ₹1,500 returned by Farah (a customer) were recorded in the purchases return book. Rectify.

Done: Farah’s A/c Dr. 1,500 (treated like a supplier to whom we returned goods); Purchases Return A/c Cr. 1,500.
Should be: Sales Return A/c Dr. 1,500; To Farah’s A/c 1,500.
Compare: Sales Return short debit ₹1,500 → debit. Purchases Return excess credit ₹1,500 → debit. Farah was debited 1,500 but should be credited 1,500 → credit ₹3,000.

Particulars	Dr (₹)	Cr (₹)
Sales Return A/c Dr.	1,500
Purchases Return A/c Dr.	1,500
To Farah’s A/c		3,000
(Being sales return wrongly recorded in the purchases return book, now rectified)

Credit purchases of ₹7,000 from Lalit Traders were recorded in the sales book. Pass the rectification entry. (Two debits, one credit.)

Done: Lalit Traders Dr. 7,000, Sales Cr. 7,000. Should be: Purchases Dr. 7,000, Lalit Traders Cr. 7,000.

Purchases has a short debit of ₹7,000 → debit. Sales has an excess credit of ₹7,000 → debit. Lalit Traders was debited 7,000 but should be credited 7,000 → credit ₹14,000.

Particulars	Dr (₹)	Cr (₹)
Purchases A/c Dr.	7,000
Sales A/c Dr.	7,000
To Lalit Traders’ A/c		14,000
(Being credit purchases wrongly recorded in the sales book, now rectified)

Goods of ₹2,500 returned by Imran (a customer) were recorded in the purchases return book. In the rectification entry, with what amount (in ₹) will Imran’s account be credited?

He was debited when he should have been credited.

Imran was wrongly debited ₹2,500 and should have been credited ₹2,500. To move from −2,500 to +2,500 on the credit side we need ₹5,000 credit. (Debits: Sales Return ₹2,500 and Purchases Return ₹2,500.)

5. Errors of principle and other two-sided errors

These are the most common questions in board papers. The method is the same: find the wrong account and the right account.

Rectify the following errors in the books of Sharma Traders:
(i) Furniture bought on credit from Singh Furniture ₹12,000 was recorded in the purchases book.
(ii) Repairs to machinery ₹2,000 were debited to Machinery A/c.
(iii) Wages paid ₹1,500 for installing a new machine were debited to Wages A/c.
(iv) Sale of an old computer for ₹5,000 was credited to Sales A/c.
(v) Rent ₹6,000 paid to the landlord, Mr. Verma, was debited to his personal account.
(vi) Goods costing ₹1,000 taken by the owner for personal use were not recorded.
(vii) Material ₹8,000 and wages ₹3,000 were used in constructing an extra room in the shop building. No entry was made.

(i) Purchases got an excess debit; Furniture got nothing. Singh Furniture is correctly credited (it was posted from the purchases book). → Furniture Dr., To Purchases.
(ii) Machinery excess debit, Repairs short debit → Repairs Dr., To Machinery.
(iii) Installation wages are part of the machine’s cost → Machinery Dr., To Wages.
(iv) Sales excess credit, Computer short credit → Sales Dr., To Computer.
(v) Landlord’s A/c excess debit, Rent short debit → Rent Dr., To Mr. Verma’s A/c.
(vi) Complete omission → Drawings Dr., To Purchases (goods at cost).
(vii) The room is a capital asset: Building Dr. 11,000. The material was bought as purchases and the wages were debited to Wages, so those accounts are credited.

Date	Particulars	Dr (₹)	Cr (₹)
(i)	Furniture A/c Dr.	12,000
	To Purchases A/c		12,000
	(Being credit purchase of furniture wrongly recorded in the purchases book, now rectified)
(ii)	Repairs A/c Dr.	2,000
	To Machinery A/c		2,000
	(Being repairs wrongly debited to Machinery A/c, now rectified)
(iii)	Machinery A/c Dr.	1,500
	To Wages A/c		1,500
	(Being installation wages wrongly debited to Wages A/c, now rectified)
(iv)	Sales A/c Dr.	5,000
	To Computer A/c		5,000
	(Being sale of old computer wrongly credited to Sales A/c, now rectified)
(v)	Rent A/c Dr.	6,000
	To Mr. Verma’s A/c		6,000
	(Being rent wrongly debited to the landlord’s personal account, now rectified)
(vi)	Drawings A/c Dr.	1,000
	To Purchases A/c		1,000
	(Being goods withdrawn for personal use not recorded, now recorded)
(vii)	Building A/c Dr.	11,000
	To Purchases A/c		8,000
	To Wages A/c		3,000
	(Being material and wages used for construction of building, now adjusted)

In (i), do not touch Singh Furniture’s account. It was credited from the purchases book, and a credit supplier must be credited anyway. The only mistake is Purchases instead of Furniture.

Cash received from Karan ₹5,000 was posted to the credit of Kiran’s account. Pass the rectification entry.

The error is in posting from the cash book, so Cash A/c is correct. Who got an extra credit, and who is short of a credit?

Kiran has an excess credit → debit Kiran. Karan has a short credit → credit Karan. Cash is not touched.

Particulars	Dr (₹)	Cr (₹)
Kiran’s A/c Dr.	5,000
To Karan’s A/c		5,000
(Being cash received from Karan wrongly credited to Kiran, now rectified)

Cash sales of ₹4,000 were shown in the cash book as commission received. Pass the rectification entry.

Cash is right either way. Which account was credited instead of Sales?

Commission Received got an excess credit → debit it. Sales got a short credit → credit it.

Particulars	Dr (₹)	Cr (₹)
Commission Received A/c Dr.	4,000
To Sales A/c		4,000
(Being cash sales wrongly credited to Commission Received A/c, now rectified)

6. Rectifying compensating errors

Each error in a compensating pair is corrected separately (or together, if the two accounts are linked). Example: Wages A/c was debited ₹500 extra and Rent A/c was debited ₹500 short. Wages has an excess debit (credit it); Rent has a short debit (debit it).

Particulars	Dr (₹)	Cr (₹)
Rent A/c Dr.	500
To Wages A/c		500
(Being compensating errors in Wages and Rent accounts rectified)

7. Assumptions the examiner expects

Questions are short, so you must fill the gaps with standard assumptions. The most useful ones:

If the error is in the book of original entry, assume all postings were made according to that (wrong) record.
If the error is at the posting stage, assume the book of original entry is correct.
“Posted to a wrong account” (side and amount not mentioned) → assume the correct side and correct amount.
“Posted with a wrong amount” (side not mentioned) → assume the correct side.
“Posted to the wrong side” (amount not mentioned) → assume the correct amount.
A posting error for an individual entry of a subsidiary book affects only the party’s account; Sales, Purchases and Returns accounts are posted from totals and are not involved.
For a transaction recorded in the cash book, a posting error concerns the other account, never Cash or Bank A/c.
For a journal proper entry, “not posted” means neither account was posted, unless stated otherwise.
A casting error in a subsidiary book affects only the account to which its total is posted.

Most of these assumptions matter more for one-sided errors, which you will meet in the next lesson. Keep this list handy.

Credit purchase of machinery from Arjun Engineering ₹30,000 was recorded in the purchases book. The rectification entry is:

Purchases A/c Dr. To Machinery A/c
Machinery A/c Dr. To Arjun Engineering’s A/c
Arjun Engineering’s A/c Dr. To Machinery A/c
Machinery A/c Dr. To Purchases A/c

Arjun Engineering was correctly credited (from the purchases book). Only Purchases got a wrong debit that belonged to Machinery.

Salary of ₹9,000 paid to Ravi, an employee, was debited to Ravi’s personal account. The rectification entry is:

Salaries A/c Dr. To Ravi’s A/c
Ravi’s A/c Dr. To Salaries A/c
Salaries A/c Dr. To Cash A/c
Salaries A/c Dr. To Suspense A/c

Ravi’s personal account has an excess debit (credit it); Salaries has a short debit (debit it). The trial balance was not affected, so there is no suspense account.

Board tip: Each rectification entry usually carries 1 mark: ½ for the correct accounts and ½ for correct amounts. Always write a narration beginning “Being … wrongly …, now rectified”. It shows the examiner you understood the error.

📌 Points to remember (Quick Revision)

Rectification = cancel the wrong effect + restore the correct effect, through a journal entry; never erase.
Three steps: what was done, what should have been done, then compare account by account.
Debit the account with a short debit or excess credit; credit the account with an excess debit or short credit.
Accounts that are already correct never appear in the rectification entry.
Wrong book: assume all postings followed that book, so the party may need double the amount.
Errors of principle: move the amount from the wrong account (capital/revenue) to the right one, e.g. Machinery Dr. To Wages.

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