A cost element exists for G/L account &1. CO account assignment required

What causes this issue?

The specified G/L account is a cost component, but you did not enter an
auxiliary account assignment (cost center, etc.).
When a posting is made to this account, an appropriate auxiliary
account assignment is required, and must come from te respective
<DS:GLOS.contract>contract</> kommen.

System Response

How to fix this error?

Make sure that the involved contracts have an appropriate auxiliary
account assignment or enter a default value here.

Error message extract from SAP system. Copyright SAP SE.