Question

State whether True or False:
If the amount is posted in the wrong account or it is written on the wrong side of an account, it is called Error of commission.

• A. True
• B. False

Answer 1

The correct option is A True

Option A is correct.

Errors of commission are the errors which are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of amount in the books of original entry, etc.

For example: Raj Hans Traders paid Rs. 25,000 to Preetpal Traders (a supplier of goods)). This transaction was correctly recorded in the cash book. But while posting to the ledger, Preetpal's account was debited by Rs. 2,500 only. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect in the trial balance.