Transposition Error

AAA

DEFINITION of 'Transposition Error'

A simple error of data entry. Transposition errors occur when two digits that are either individual or part of a larger sequence of numbers are reversed (transposed) when posting a transaction. Although this error is small and unintentional, it can result in huge financial losses or errors in some instances.

INVESTOPEDIA EXPLAINS 'Transposition Error'

When two adjacent numbers are transposed, the resulting mathematical error will always be divisible by 9 (e.g. (72-27)/9 = 5). Bank tellers can use this rule to quickly find their errors in many cases. Transposition errors also occur in accounting firms, brokerages and all other areas of finance.

RELATED TERMS
  1. Bad Check

    A check drawn on a nonexistent account or on an account with ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Bank

    A financial institution licensed as a receiver of deposits. There ...
  4. Bounced Check

    A slang word for a check that cannot be processed because the ...
  5. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  6. Accounting Control

    Methods and procedures that are implemented by a firm to help ...
Related Articles
  1. Credit & Loans

    The Evolution Of Banking

  2. Professionals

    Becoming A Financial Analyst

  3. Insurance

    Your First Checking Account

  4. Options & Futures

    Choose To Beat The Bank

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center