Errors of commission
Definition & Explanation
If we debit or credit an account, other than the correct account, but with the correct amount, the total debits and credits in the ledger will remain equal and hence the trial balance will not disclose the error.
Effects on Accounts
Two effects are possible:
- Either the correct account will not be debited and an irrelevant account will be debited
- 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:
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:
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.