Error of Commission (Cambridge International IGCSE Accounting)

Error of commission

What is an error of commission?

• An error of commission occurs when one entry for a transaction is entered into an incorrect account but the type of account is correct

  • A debit entry could have been entered into the wrong expense account
  • A transaction could have been entered into an account for the incorrect customer
  • A transaction could have been entered into an account for the incorrect supplier

• The correct amount is included in the total for the debits and the total for the credits

  • The totals will therefore balance

How do I correct an error of commission?

• Undo the entry in the incorrect account

  • This means making an equal entry on the opposite side of the account

• Make an entry in the correct account

Worked Example On 1 March 2024, Ashika identified an error where goods were sold to Kiha for $200, but the entry was made in Dinah’s account in the sales ledger. The transaction was entered correctly in the sales account.

Prepare journal entries to correct the error. A narrative is required.

Answer:

The accounts currently look like:

• Debit Dinah $200
• Credit sales $200

The accounts should look like:

• Debit Kiha $200
• Credit sales $200

Fix the errors

• Undo the mistake by crediting Dinah’s account
• Debit Kiha’s account

Final answer: Journal

Final answer: Date	Final answer: Details	Final answer: Debit Final answer: $**	Final answer: Credit Final answer: **$
Final answer: 2024 Final answer: Mar 1	Final answer: Kiha	Final answer: 200
	Dinah		Final answer: 200
	Final answer: Correction of error of commission - credit sale was debited to Dinah’s account instead of Kiha’s