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WAEC Financial Accounting 1995 Question 5

Question 5

Correction of Errors and Suspense Account

If incorrect entries on the debit side equal other incorrect entries on the credit side, the error is that of

  1. A.original entry
  2. B.omission
  3. C.commission
  4. D.compensation
  5. E.principle.
Show the answer and explanation

Answer: D (compensation)

Explanation

Errors that cancel each other out are compensating errors.