Skip to main content

Common errors in accounting: transpositions and slides

Errors are acceptable in accounting to some limitations. They are avoidable / correctable when we reconcile or update account receivables with clients. The main 2 errors which must be corrected are:

Transpositions
Lets assume an account should have been debited $4650. If the error is transposition you might notice that the number appears to be $4560 or $465 asthe digits are altered incorrectly.

Slides
There are times where an account is debited with a left/right shifted decimal point. Lets assume that $465 is written instead of $4651.

In both errors, intentional or not, accountants can cause frustration and confusion among their peers, shareholders and other decision makers. Reviwing accounts by the accountant or others can help correcting such mistakes. 

Popular posts from this blog

What is Cumulative Return?

Cumulative return represents the total change in the value of an investment over a specific period, expressed as a percentage. It's essentially the overall profit or loss you've made on an investment from the beginning to the end of the period. Here's a breakdown: What it measures:  The total return of an investment, accounting for both capital appreciation (increase in value) and any income received (like dividends or interest). How it's calculated:  The basic formula is: Cumulative Return = [(Ending Value - Beginning Value) / Beginning Value] * 100 For example: You invest $1,000. After 5 years, your investment is worth $1,500. Cumulative Return = [($1,500 - $1,000) / $1,000] * 100 = 50% Key Considerations: Time Period:  Always specify the time period over which the return is calculated (e.g., "5-year cumulative return"). Simplicity:  Cumulative return gives a simple, overall view of performance, but it doesn't tell you  how  the returns were generated or...
Read more

What's The Difference Between Adjusted Close Price and Close Price?

The  Close Price  and  Adjusted Close Price  represent the price of a stock at the end of a trading day, but they differ in how they account for corporate actions that can affect a stock's price. Here's a breakdown: Close Price:  This is simply the final price at which a stock traded during regular trading hours on a given day. It's the raw, unadjusted price. Adjusted Close Price:  This price takes into account corporate actions like: Dividends:  Cash payments made to shareholders. Stock Splits:  When a company increases the number of its shares outstanding by dividing each existing share into multiple shares. Stock Dividends:  Distributing additional shares to existing shareholders instead of cash. Rights Issues/Offerings:  Giving existing shareholders the right to purchase additional shares at a discount. Spin-offs:  Creating a new independent company by distributing shares of that business to existing shareholders. How the Adjust...
Read more

How to record Goods & Service Tax

GST has been introduced in many countries for many years. It might have other names in other countries or similar concept for its implication. Recording it might be a bit of confusion for some. The best way of recording it is to split it into 2 parts - 1. GST Collections 2. GST Outlays The main characteristics GST Collections are -  + Recorded as liability + Collected from buyers, clients, customers GST Outlays -  + Recorded as asset + Claimbale from tax office It should be carefully collected and paid to prepare accurate financial statements. Have this as a solid base in mind for your future calculations. 
Read more