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WAEC Financial Accounting 2001 Question 14

Question 14

Correction of Errors and Suspense Account

Commission of N5,000 to a sales representative is debited to salaries account. This is an error of

  1. A.reversal of entries
  2. B.principle
  3. C.commission
  4. D.compensation.
Show the answer and explanation

Answer: C (commission)

Explanation

The amount was posted to the right class of account (an expense) but the wrong account (salaries instead of commission). That is an error of commission; an error of principle puts an item in the wrong class, e.g. an asset posted as an expense.