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If the amount is posted in the wrong account or it is written on the wrong side of the account, it is called
- a)Error of omission.
- b)Error of commission.
- c)Error of principle.
- d)Compensating error.
Correct answer is option 'B'. Can you explain this answer?
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If the amount is posted in the wrong account or it is written on the w...
Error of Commission
An error of commission is a type of accounting mistake that occurs when an entry is recorded incorrectly or in the wrong account. This error can occur for a variety of reasons, such as a typo, a misunderstanding of accounting principles, or a lack of attention to detail.
Examples of Error of Commission
Some examples of an error of commission include:
- Posting an expense in the wrong account.
- Recording a sale twice.
- Entering an incorrect amount for a transaction.
- Posting a transaction to the wrong period or accounting period.
- Recording a transaction on the wrong side of the account.
Correcting Error of Commission
To correct an error of commission, the accountant will need to identify the mistake and make the necessary adjustments. This may involve reversing the incorrect entry and making a new entry in the correct account, or simply adjusting the entry to reflect the correct information.
Importance of Avoiding Errors of Commission
Avoiding errors of commission is important because it can lead to inaccurate financial statements, misrepresentation of financial information, and incorrect decisions being made based on that information. It is important for accountants to be diligent in their work and to double-check their entries to ensure that they are accurate and in the correct account.
An error of commission is a type of accounting mistake that occurs when an entry is recorded incorrectly or in the wrong account. This error can occur for a variety of reasons, such as a typo, a misunderstanding of accounting principles, or a lack of attention to detail.
Examples of Error of Commission
Some examples of an error of commission include:
- Posting an expense in the wrong account.
- Recording a sale twice.
- Entering an incorrect amount for a transaction.
- Posting a transaction to the wrong period or accounting period.
- Recording a transaction on the wrong side of the account.
Correcting Error of Commission
To correct an error of commission, the accountant will need to identify the mistake and make the necessary adjustments. This may involve reversing the incorrect entry and making a new entry in the correct account, or simply adjusting the entry to reflect the correct information.
Importance of Avoiding Errors of Commission
Avoiding errors of commission is important because it can lead to inaccurate financial statements, misrepresentation of financial information, and incorrect decisions being made based on that information. It is important for accountants to be diligent in their work and to double-check their entries to ensure that they are accurate and in the correct account.
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If the amount is posted in the wrong account or it is written on the w...
Error of commission occurs when an entry is recorded incorrectly, either in the wrong account or on the wrong side (debit instead of credit or vice versa). This type of error happens due to carelessness or misunderstanding but does not involve breaking any accounting principles.
Other types of errors:
- Error of omission: Occurs when a transaction is completely left out of the books.
- Error of principle: Involves violating accounting principles, such as recording a capital expenditure as a revenue expense.
- Compensating error: Happens when two or more errors offset each other, so the trial balance still tallies.
In this case, the error of posting to the wrong account or the wrong side is an Error of commission.
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If the amount is posted in the wrong account or it is written on the wrong side of the account, it is calleda)Error of omission.b)Error of commission.c)Error of principle.d)Compensating error.Correct answer is option 'B'. Can you explain this answer?
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