Multiple choice

The errors which adjust the effect of some other mistakes are called

  1. errors of omission

  2. errors of commission

  3. errors of principle

  4. compensating errors
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Compensating errors are those which compensate the effect of another error. The entries made in contravention of accounting principles are errors of principle. Error of omission refers to complete/partial omission of transaction from the books of account. When an entry is posted with wrong amount or on wrong side, it is the error of commission.

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