Errors of Commission – Definition
These types of errors occur due to the negligence of book-keeper, clerk or accountant. As errors of commission are often caused due to the mistake committed by the clerk, they are also called as clerical errors. Also known as error of inadvertence.
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.
We take a look at a few examples to illustrate how these errors are caused:
(a). Entering the wrong amount in the correct subsidiary book.
(b). Posting the correct amount to a wrong subsidiary book.
(c). Posting the wrong amount to the correct side of the account.
(d). Posting a correct amount to the wrong side of the account.
(e). Posting is done twice (double posting).
(f). Posting to the wrong account of the same class i.e., cash paid to B is debited to B and Bros. account.
(g). Other types of errors arising out of casting, posting, carryforwards, balancing, etc. also fall under this category.
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.