Q.Some accounting errors are given below :

Answer: The trial balance.

Double-sided (two-sided) errors - such as errors of omission, principle and compensating errors - affect two accounts equally on both sides, so the trial balance still agrees. …

Answer: Compensating errors.

Compensating errors are two or more errors that cancel out each other's effect, so the trial balance still …

Answer: Errors that disturb the agreement (one-sided errors of commission).

A trial balance detects only those errors that make the two sides unequal - chiefly one-sided errors: wrong totalling (casting), posting a wrong amount, or posting to the wrong side. It cannot detect errors of omission, principle or compensating erro …

Wrong balancing of an account is an Error of Commission. Correct option: (a) Error of Commission.

Errors of commission are clerical errors committed while recording, posting, casting (totalling) or balancing accounts — for example, wrong totalling, wrong balancing, posting a wrong amount, or posting to the wrong side. Since “wrong balancing of account” is a mistake in computing the balance of a ledger account, it is a classic error of commission.

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The error that affects the agreement of the trial balance is error of partial omission — option (d).

From the Kerala Plus One (DHSE) Accountancy chapter Trial Balance and Rectification of Errors:

Errors are of two broad kinds:

• Errors that do NOT affect the trial balance (both debit and credit are equally wrong or both are missing): error of complete omission (the whole entry is left out), error of principle (wrong classification, but debit = credit), and compensating errors (two or more errors that cancel out). …

Wrong balancing of Furniture account is an error of commission — option (c). Kerala Plus One (DHSE) Accountancy, Trial Balance and Rectification of Errors.

An error of commission is a clerical error made in recording, posting, totalling (casting) or balancing, where the right account is used but the mechanics go wrong (wrong amount, wrong side, wrong casting, wrong balancing).

Examining each option:

• (a) Wages paid for installation of machinery debited to Wages A/c — a capital expenditure treated as revenue expenditure = error of principle.
• (b) Purchase of goods for cash not recorded at all — a transaction completely left out = error of omission. …

Correct option: (b). Agreement of the trial balance does not prove the books are error-free; only two-sided (equal-effect) errors can still be present.

A trial balance agrees when the total of debit balances equals the total of credit balances. This proves only arithmetical accuracy. Errors that affect two accounts equally on both sides — errors of complete omission, errors of principle and compensating errors — do not disturb this equal …

A compensating error is one offset by another error of equal and opposite effect; a Suspense A/c temporarily balances a disagreeing Trial Balance.

Compensating error: This occurs when the effect of one error is exactly neutralised by one or more other errors of an equal amount in the opposite direction. Because the excess debit of one error is cancelled by an equal excess credit of another, the Trial Balance continues to agree and the error is not easily detected. Example: Ram's account over-debited by Rs 500 and Shyam's account over-credited by Rs 500.

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Rectification of errors is necessary so that the accounts, profit/loss and Balance Sheet give a true and fair view.

If errors are left uncorrected, the ledger balances will be wrong, which in turn distorts the Trial Balance, the computed profit or loss, and the Balance Sheet. Rectification of errors is therefore necessary:

1. To show the correct balances of all affected accounts.
2. To arrive at the correct amount of profit or loss for the period.
3. To present a true and fair view of the financial position in the Balance Sheet. …