Errors of commission is one of the types of errors in accounting or in other words, accounting errors. It is caused when an accountant or the bookkeeper makes a debit or credit correctly in the account but in the wrong subsidiary books.
Errors of commission is a type of clerical error that happens when a mistake is committed by the clerk in recording of transactions in the book of accounts.
The errors of commission are basically errors in arithmetical accuracy. The following scenarios can lead to errors of commission:
1. Recording of wrong amount in the correct subsidiary books
2. Recording of correct amount in the wrong subsidiary book
3. Incorrect totalling of the subsidiary books
4. Incorrect totalling of the ledger balances
5. Incorrect amount posted in ledger accounts
6. Posting is done twice for the same amount
7. Posting of wrong amount in the correct side of the account
8. Posting of correct amount in the wrong side of the account
The impact of such errors is that
a. An incorrect account will be debited instead of the correct account
b. An incorrect account will be credited instead of the correct account
Rectification of Entry
Whenever an incorrect account is debited instead of the correct account, the following steps can be taken:
Debit the correct account and credit the incorrect account that has been wrongly debited.
Whenever an incorrect account is credited instead of the correct account, the following steps can be taken:
Debit the incorrect account that has been wrongly credited and credit the account that should be credited originally.
Examples of Errors of Commision
Following are some of the examples of errors of commission.
1. Money received from a customer is correctly credited to the accounts receivable account, but for the wrong customer.
2. Payment applied to the wrong invoice is also an example of errors of commission. It will result in the trial balance being correct, but the subsidiary ledgers will be having incorrect data.
This concludes our article on the topic of Errors of Commission, which is an important topic in Accountancy for Commerce students. For more such interesting articles, stay tuned to BYJU’S.