How is an error of commission accurately defined?

An error of commission is defined as making a debit and credit entry but to the wrong account. This type of error occurs when a transaction is recorded in the wrong account rather than being omitted entirely or miscalculated. For example, if a payment that should have been recorded as an expense is instead posted to a different expense account, it affects the accuracy of the financial statements but does not eliminate the transaction from the books.

This concept helps in analyzing the accuracy of financial records. Recognizing that an entry is recorded but incorrectly directed to another account is critical for identifying how the financial statements can still reflect all transactions, albeit in the wrong categories. Understanding this distinction is essential for both preparing financial statements and conducting audits, as it emphasizes the importance of account accuracy in maintaining reliable financial records.