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WAEC Financial Accounting 2014 Question 9

Question 9

Correction of Errors and Suspense Account

Purchases Account is overcast by ₦200, while Wages Account is undercast by ₦200. This is

  1. A.an error of omission.
  2. B.a compensating error.
  3. C.an error of commission.
  4. D.an error of principle.
Show the answer and explanation

Answer: B (a compensating error.)

Explanation

The ₦200 too much on one debit account is cancelled by ₦200 too little on another, so the two errors compensate and the trial balance still agrees.