What is a double counting?

Double Counting is a mistake made in the company's financial information. This occurs when accountants or other employees record information twice in the main book. Problems that include double counting often occur with inventory counting, invoicing twice, adding numbers twice or similar actions. The theory of values ​​comes into play with these accounting errors, which means that most of these problems can lead to further added value, reduced value or transferred value. Fortunately, these types of accounting errors are usually easy to fix. This adds value because the company will report a higher inventory in the balance sheet and increases current assets. Higher current assets can artificially reduce financial conditions that determine how the company uses debt to pay inventory. The stock turnover also reports false information. The turnover will be lower as the Moinventory re reported than in fact in the company's devices. Double counting of sales is also a common tool for dieselSales. This allows the company to increase its reported net profit, so the company will look better financially. Many companies have several internal inspections that protect against two counting on sale, so no questions about the validity of the reported sales data. Audits are usually a primary tool to confirm the validity of financial data.

Reduced values ​​with double counting appear when the accountant enter information about the outflow twice into the main book. Recording inventory modifications, sales or discount revenues, employee wages, supplier invoices or similar information can lead to a lower reported value twice. As a result, the company will look even worse of Financially. In some cases, the reduced value will also lead to a higher outflow of funds if the company pays the wage or invoices of the supplier twice. The main mistakes may result in significant publicationfinancial statements or reworking or previously published financial information.

The transferred value may occur within the double counting process. If the company allows errors to lead to higher cash outflows, as mentioned above, the company will transfer its value to other companies. This results in lower fixed value and possibly inability to fix these problems. For example, if the company cannot obtain additional payments to the supplier, this value will be lost. This results in a permanent transferred value. Companies may need to report this information separately when preparing the financial statements for the parties.