Q400
If an effect of an error is cancelled by the effect of some other error, it is commonly known as
A.
Error of principle
B.
Compensatory errors
AnswerC.
Error of omission
D.
Error of commission
Answer: Option B
Solution
Answer: Option B
Solution:
If an effect of an error is cancelled by the effect of some other error, it is commonly known as Compensatory errors. A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero.