WAEC Accounting 2015 Theory — Question 4

Model answer

(i) Compensating error: an error which occurs in the debit side of one account, and the same amount is mistakenly credited to another account (such as posting N50 above on the credit side of one account and mistakenly posting the same amount above in a debit side of another account). (ii) Error of omission: a situation where a transaction is totally omitted from the ledger. This type of error will not affect the trial balance. (iii) Error of commission: a type of error that involves posting a transaction in a wrong name, such as posting a transaction meant for Ogi to Igo's account. (iv) Error of principle: this involves posting a transaction in a wrong category of account, such as posting machinery repair cost in a machine account. (v) Error of original entry: this involves making an error at the initial stage of posting such as entering an amount of N1010 as N1000 in the ledger.