Types of error

In this lesson

1. 0:00 Types of error: Balanced versus unbalanced
2. 0:50 Errors that don't create imbalance
3. 1:02 Error of omission explained
4. 1:18 Error of original entry and compensation
5. 2:04 Error of reversal, principle, and commission
6. 3:06 Correction process: Four-step methodology
7. 4:01 Worked example: Identifying correction journals
8. 6:14 Error of omission correction
9. 7:04 Error of principle correction
10. 8:02 Error of original entry correction
11. 9:12 Errors that create imbalance and suspense accounts

About this lesson

This video distinguishes between errors that create an imbalance in the trial balance (which are easier to spot) and those that don't, then walks you through the step-by-step correction process for each type. You'll explore errors of omission, original entry, reversal, principle, and commission, plus one-sided entries and transposition errors, using worked examples to show exactly how to post the correcting journals and clear a suspense account. Understanding error types is essential because spotting mistakes early prevents them from cascading through your financial statements. The video breaks down a four-step correction method—what happened, what should have happened, what correction is needed, and how to post the journal—making even complex errors feel manageable. By the end, you'll be confident identifying which errors a trial balance will catch and which ones slip through, and you'll know precisely how to fix them in an exam or real-world scenario.

Duration: 11m