Accounting Online Program Certification Practice Test

An error of commission in accounting occurs when an entry is recorded inaccurately but within the same class of accounts. This typically happens when one side of a transaction is posted to the wrong account, leading to a misrepresentation of the financial statements, even though the underlying transaction itself is acknowledged. For instance, if a company purchases office supplies for $100 and mistakenly charges the expense to an office equipment account instead of the supplies account, the correct total expenses are recorded, but the specific account’s allocation is wrong.

This definition distinguishes it from other types of errors, such as failing to record a transaction altogether, which is classified as a complete omission. Misstating amounts in the financial statements reflects errors in the quantitative details rather than incorrect account allocations. Recording an entire transaction inaccurately encompasses broader mistakes that may include multiple errors across different accounts. Thus, the correct identification of an error of commission focuses on the specific misallocation within the same account class rather than errors that completely overlook transactions or misstate their amounts.