WAEC Accounting 2014 Objective — Question 9

Question 9 of 50 from the West African Examinations Council (WAEC) Accounting 2014 Objective paper, with the correct answer and a full explanation.

Purchases Account is overcast by N200, while Wages Account is undercast by N200. This is

A. an error of omission
B. a compensating errorCorrect
C. an error of commission
D. an error of principle

Explanation

A compensating error occurs when an error committed in one account is compensated for by an equal and opposite error in another account, as with the overcast/undercast here.

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