List the types of Clerical Errors. Distinguish between Errors and Frauds.

The clerical errors are of three types:

Errors of Commission: It may be committed either at the stage of recording a transaction in a books of accounts or while posting it to the ledger. Errors in totalling and balancing of accounts or in carrying forward totals in the trial balance are also errors of commission.

Errors of Omission: It occurs when a transaction is not recorded in the books of accounts, either wholly or partially. As the transaction is not posted to the account it will not have any effect on the trial balance.

Compensating Errors: A compensating error results in compensating the effects of other errors. It may seem that there is little or no difference between the two sides of the trial balance but there might be a number of errors lying hidden in the books of accounts.

Error and Fraud

An error means an innocent mistake made by a person while recording a transaction in the books of accounts or other records like carrying wrong total from one page to another, carrying wrong total from subsidiary books to ledger accounts, capital expenditure may wrongly be treated as revenue expenditure and vice versa etc.

A fraud is an error or mistake made willfully and knowingly with a view to deceive or cheat the other people. Detection of error is comparatively an easy work because it is not done in a planned way. But detection of error is a difficult task as it is done in a planned way.