Errors of Commission

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on August 20, 2021

Errors of Commission: Definition

Errors of commission occur due to the negligence of the accountant or clerk. For this reason, they are often referred to as clerical errors or errors of inadvertence.

Let’s consider a few examples to show how errors of commission are caused:

  • Entering the wrong amount in the correct subsidiary book
  • Posting the correct amount in the wrong subsidiary book
  • Posting the wrong amount to the correct side of the account
  • Posting the correct amount to the wrong side of the account
  • Double-posting (i.e., posting is done twice)
  • Posting to the wrong account of the same class (i.e., cash paid to B is debited to B & Bros.)

Other types of errors of commission may arise out of casting, posting, carryforward, and balancing.

Effects on Accounts

One of two effects is possible. Either the correct account will not be debited and an irrelevant account will be debited, or the correct account will not be credited and an irrelevant account will be credited.

Rectification of Entry

If an irrelevant account is debited instead of the correct account, follow these steps:

  1. Debit the account that should have been debited
  2. Credit the account that has been erroneously debited

If an irrelevant account is credited instead of the correct account, take these measures:

  1. Debit the account that has been erroneously credited
  2. Credit the account that should have been credited

Example

A credit sale of goods for $7,200 to Mr. David was erroneously debited to Mr. John’s account.

Journal Rectification Entry 1

Example

A cheque for $3,480 was received from Royal Motors but was erroneously credited to TAU Motors’ account.
Journal Rectification Entry 2

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

10 thoughts on “Errors of Commission”

  1. Hi, I agree with the above examples but does an error of commission always involve personal accounts? What if I pay $20 for motor expenses and by mistake I enter it in the stationery account?

    Reply
  2. Is the second example correct??
    Original (incorrect) entry would have been Dr Bank and Cr TAU Motors, surely the reversing journal entry would have Dr TAU Motors (credited in error) and Cr Royal Motors (who sent the cheque and expect their balance to be reduced!) I’m confused….

    Reply
  3. I agree with Amanda. In our books we have the Bank acc and TAU Motors acc of which Tau Motors is an irrelevant account there so our correcting entry should be Debit Tau Motors acc to close the wrong acc and Credit Royal motors acc which is the relevant account.

    Reply
  4. How it was recorded in the books
    Bank (dr) 3480
    Tau motors(cr) 3480
    Truly nothing shuld be corrected regarding the bank entry but Tau motors is irrelevant therefore it has to be closed and a correct entry shuld be made in the correct account (Royal motors).
    rectifying entry
    Tau motors (dr) 3480
    Royal motors (cr) 3480

    Reply
  5. The effects of the following examples of errors of commission is not discussed above
    (a). Entering the wrong amount in the correct subsidiary book.
    (b). Posting the correct amount to a wrong subsidiary book.
    “WRONG AMOUNT”

    Reply
  6. In explaining the errors of commission, I realize that almost everyone is saying that it is an error where the entry is made in the wrong person’s account. However, I think that it goes beyond this. When I teach my students, I tell them that an error of commission is where the two accounts affected are of the same class, however, the entry is made in the wrong account of the two. For example, A motor van bought for $45 000 was recorded in the Machinery Account. Here we have two real accounts but the entry was recorded in the wrong one. Isn’t this also an error of commission?

    Reply

Leave a Comment