Accounting is, by definition, about accuracy. There are plenty of common mistakes that entry-level accountants make, so it’s helpful to know what they are and how to avoid them. The learning process is essential, so consider these entry-level accounting errors so you don’t make these critical mistakes. That way, you’re ready and able to take on the industry as you enter the field, gain experience, and progress throughout your career. Here the most common mistakes to watch out for on the job.
Data Entry Errors
When you enter the information into an account from the beginning, the wrong amount is posted to that account. This would reflect in every amount moving forward related to that transaction. So the account may appear to be in balance, but the amount would be wrong.
Duplication Error
Sometimes, an accounting entry is duplicated. This means you’ve entered the debit or credit twice for the same entry. It’s a common mistake, but it will throw off the final balance and could be hard to determine after the fact.
Error of Omission
Another very easy error is an omission. This is when a transaction is not entered when it occurred. This happens often with accounts payable when an invoice may be missed. Or you may fail to record the sale of a product which will be reflected in the accounts payable process.
Compensating Error
Errors can compound over time. For example, if you enter the wrong amount in one place and that information is used for an entry in another place, that error will be reflected multiple times. The danger here is understanding where the error started so you don’t only fix one instance.Error of Principle
It can also become complicated when you use a specific accounting principle but apply it in the wrong way. For example, in terms of taxes, some purchases are considered an operating expense. But what if an item which should be a fixed asset is accounted for in the wrong place?
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