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:
- Debit the account that should have been debited
- Credit the account that has been erroneously debited
If an irrelevant account is credited instead of the correct account, take these measures:
- Debit the account that has been erroneously credited
- Credit the account that should have been credited
A credit sale of goods for $7,200 to Mr. David was erroneously debited to Mr. John’s account.
A cheque for $3,480 was received from Royal Motors but was erroneously credited to TAU Motors’ account.