A. ON THE BASIS OF NATURE
1. ERROR OF OMISSION:
It results from a complete or partial omission of recording a transaction.
2. ERROR OF COMMISSION:
It results from an act of commission i.e. entries wrongly made in the journal or ledger. It may be an
error of posting,
error of casting,
entering wrong amounts,
entering a transaction in a wrong subsidiary book etc.
Unless the effects of errors of commission counterbalance each other, the agreement of the trial balance becomes affected.
3. ERROR OF PRINCIPLE:
It Is an error occurring due to wrong application of basic Accounting Principles. The main reason behind such an error is incorrect classification of capital and revenue items..
4. COMPENSATING ERRORS:
If the effect of an error is counterbalanced or cancelled out by the effect of another error or errors then such errors are known as compensating errors.
B. ON THE BASIS OF EFFECTS:
1. ONE SIDED ERRORS:
One sided error is an error whose effect falls on only one account. It may arise due to
Wrong casting of any day book;
Posting made to the Wrong side of the relevant account;
Duplicate posting of the same amount in an account.
One Sided errors cause a disagreement of the trial balance and hence are easy to detect.
2. TWO SIDED ERRORS:
A) Two sided error maybe
Affecting two accounts at the same direction and not affecting the agreement of the trial balance.
3. MORE THAN TWO SIDED ERRORS:
An error which affects more than two accounts simultaneously falls in this category. This may or may not affect the agreement of a trial balance depending on the situation in each case.
