Accounting Error


DEFINITION of 'Accounting Error'

An error in an accounting item that was not caused intentionally. An accounting error can include discrepancies in dollar figures, or might be an error in using accounting policy incorrectly (i.e., a compliance error).

Accounting error should not be confused with fraud, which is an intentional error in an accounting item, usually to hide or alter data for personal gain.

BREAKING DOWN 'Accounting Error'

By doing what ever it can to follow accounting standards such as the Generally Accepted Accounting Principles (GAAP), and maintaining internal controls, a company can easily minimize accounting errors. Corrections of the errors are shown later, in a restatement of comparative financial statements.

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  3. Forensic Accounting

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  4. Restatement

    The revision and publication of one or more of a company's previous ...
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  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
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  1. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  2. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  3. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  4. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
  5. Do dividends go on the balance sheet?

    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>
  6. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>

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