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Mis-entry in the books

Inevitably, you will make occasional mis-entries to the effect that you will have to correct your accounts.

Corrections are also called post entries or adjustments.

Post entries or adjustments

Certain entries that are not usually entered in the day-to-day bookkeeping but posted at periodic intervals (e.g. on closing of the annual accounts), are called post entries too.

Similar to all other entries, post entries must be supported by a numbered voucher. Moreover, such entries should be posted with a paper voucher explaining the adjustment. However, in most cases, the text you enter in the accounts serves as explanation and a paper voucher will not be necessary.

An example:


You have two customers, both named Vijay Jain. More specifically: Vijay A. Jain and Vijay B. Jain. Accidentally, you have entered (credited) a payment received by Vijay A. Jain to Vijay B. Jain ´s account. Now you need to correct the mistake.


You correct the mistake by debiting (cross entry equaling the mistake) the payment to Vijay B. Jain ´s account and crediting the payment to Vijay A. Jain ´s account.
Originally, the payment was debited to your bank account. You do not have to adjust your bank account as this isolated part of the original entry (charge) was correct.

This type of adjustment does not need a paper voucher. It is sufficient to refer to the original entry in the text of the post entry.

An adjustment is entered by the same date as the entry it supersedes. Occasionally, you see post entries entered at a later date, but this is a bad habit causing errors or confusion at best.

Consistent errors, please

A golden rule is: if you have a tendency of making mistakes, at least be consistent! In other words: If you have doubts about the handling of a certain type of entry, then do it the same way each time.

If a certain type of entry has consistently been entered to a wrong account is it subsequently fairly easy for an accountant to correct the mistake. However, if the same type of entry has been entered in different ways (one may be the correct way), then it could be very time consuming to correct.
Go to next business issue: Re-posting a Voucher

It has been my experience that competency in mathematics, both in numerical manipulations and in understanding its conceptual foundations (accounting), enhances a person’s ability to handle our day-to-day financial decision-making.
Alan Greenspan, American economist.

Double-entry Bookkeeping
Example of an Account Plan
Account Plan - Chart of Accounts
Who is Able to Do The Accounts?
Invoice - How to Issue one
Re-posting a Voucher
Adding Vouchers
Mis-entry in the books
What is Accountancy?
Principles in Accounting
Understand Financial Info
Safeguarding Your Assets
Help to Take Action
Close your Business