Accountancy · Ch 6 — Trial Balance and Rectification of Errors
Errors of Commission
Errors of Commission
Errors of commission are mistakes that happen when a transaction is recorded in the wrong person’s account, or with the wrong amount, or is totalled or balanced incorrectly. The key point is that the double entry is incomplete or incorrect, but the error is of a clerical nature — it is not a mistake in principle (like treating a capital expense as revenue). Because the debit and credit sides are not equal in most cases, these errors usually cause the trial balance to disagree.
The textbook gives a clear example. Raj Hans Traders pays ₹25,000 to Preetpal Traders (a supplier). The payment is correctly recorded in the cash book (so the cash entry is fine). But when posting to the ledger, Preetpal’s account is debited with only ₹2,500 instead of ₹25,000. This is an error of commission — the amount posted is wrong.
What is the accounting treatment for this error?
The error is discovered when the trial balance does not tally. The difference is ₹22,500 (₹25,000 – ₹2,500). To rectify it, we need to add the missing debit to Preetpal’s account. The journal entry is:
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| Preetpal Traders A/c … Dr. | 22,500 | |||
| To Suspense A/c | 22,500 |
Why this entry? The original entry (in the cash book) was correct — cash was credited. The mistake was only in the ledger posting: Preetpal’s account got only ₹2,500 debit instead of ₹25,000. So we need to give Preetpal’s account the missing ₹22,500 debit. Since the trial balance is out by this amount, the credit goes to the Suspense Account (which holds the difference until all errors are located and corrected).
Errors of commission are clerical — wrong posting, wrong totalling, wrong balancing, wrong casting of subsidiary books, or wrong recording of amount in the books of original entry. They almost always affect the trial balance because the double entry is not equal.
Other examples of errors of commission (not in the textbook extract but logically follow from the definition):
- Posting a sale of ₹5,000 to the wrong customer’s account (e.g., to A instead of B). Here the total debits and credits are equal (both sides are ₹5,000), so the trial balance will still tally. The rectification is to transfer the amount from the wrong account to the correct one.
- Totalling the sales book as ₹1,00,000 when the actual total is ₹1,00,500. This makes the total sales (and hence the credit to sales account) short by ₹500. The trial balance will disagree. Rectification: add ₹500 to the sales account (credit) and to the suspense account (debit).
- Balancing an account incorrectly — say the debit side totals ₹50,000 and credit side ₹48,000, but the balance is wrongly taken as ₹1,000 debit instead of ₹2,000 debit. This will affect the trial balance.
Distinction from errors of omission: In errors of commission, the transaction is recorded (in the books of original entry) but posted wrongly. In errors of omission, the transaction is not recorded at all in the books of original entry. …