Lumen Lab Supplies sells equipment to school science laboratories on credit. Its bookkeeper posted a $240 invoice for glassware to the account of the wrong ...

The invoice was entered for the right amount, $240, and on the right side, as a debit. The only fault is that the debit went to one customer's account instead of another's, and both accounts are of the same type: personal accounts of credit customers in the sales ledger.

This is an error of commission: a correct amount posted to the wrong account of the right class. Because a debit of $240 has still been made somewhere in the ledger to match the $240 credit to sales, the two columns of the trial balance still agree, which is why the mistake escapes detection. It is nonetheless a real problem: one customer is shown as owing $240 more than they do and will be chased for it, while another's debt goes unbilled. Total trade receivables in the statement of financial position, however, are correct.

An error of principle is different: it means posting to an account of the wrong class, such as putting the invoice in an expense account instead of a customer's account. An error of omission would mean the invoice never entered the books at all, whereas here it was entered twice over. A compensating error requires two separate errors of equal amount on opposite sides that cancel out, and only one error has occurred.

Examination point: the correction is made through the general journal, debiting the correct customer with $240 and crediting the wrong one, with no suspense account involved because the trial balance never disagreed.