Q&A of the Week June 14, 2023

Question

What is a transposition error in accounting, and how can it be avoided?

Answer

A transposition error results when two digits are reversed when entered. For example, the correct number is $5,123, but the number entered is $1,523. 

Transposition error signs may include showing more or less than usual in the books, checks and balances not matching, or bank statements don't match your records.

You can avoid transposition errors by double-checking, using accounting software, and aiming for accuracy instead of speed.