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Rectification of errors

Accountancy

What is compensating errors with example

Samarth Kshatriya

CA Inter

★ 1K+

04-Nov-22 18:16

514

Answers (7)

Best Answer

Even if there is errors trial balance would tally...such errors are compensating errors...ex... If the entry is Cash a/c dr. 2000 To sales a/c 2000 insted of Cash a/c dr. 2500 To sales a/c. 2500 Even then trial balance tally as both Debit as well as credit effect are mistaken

Yamuna S

CA Inter

★ 15K+

04-Nov-22 18:20

It will tally even if entered as Cash a/c dr. 2000 To sales 2000 instead of Cash a/c dr. 2000 To purchase return a/c. 2000 Even These errors are in trial balance trial balance will tally...

Yamuna S

CA Inter

★ 15K+

04-Nov-22 18:22

Compensating errors are those errors that offsets another accounting error.

Balachandar S

CA Inter

★ 59K+

04-Nov-22 19:00

Yamuna S

It will tally even if entered as Cash a/c dr. 2000 To sales 2000 instead of Cash a/c dr. 2000 To purchase return a/c. 2000 Even These errors are in trial balance trial balance will tally...

But this are commission error too

Thread Starter

Samarth Kshatriya

CA Inter

★ 1K+

04-Nov-22 22:29

Thread Starter

Samarth Kshatriya

But this are commission error too

Yes.

CA Suraj Lakhotia

Admin

06-Nov-22 11:06

CA Suraj Lakhotia Admin

Yes.

Then what difference between it

Thread Starter

Samarth Kshatriya

CA Inter

★ 1K+

06-Nov-22 11:29

Thread Starter

Samarth Kshatriya

Then what difference between it

An error of commission can be compensating error as well.

CA Suraj Lakhotia

Admin

10-Nov-22 18:04