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Classify the errors : Goods taken away by the proprietor for personal use not recorded anywhere.
- a)Errors of commission
- b)Errors of omission
- c)Errors of principle
- d)Compensating errors
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Classify the errors :Goods taken away by the proprietor for personal u...
Errors of Omission:
Errors of Omission occur when a transaction is completely left out or not recorded in the books of accounts. In the given scenario, the goods taken away by the proprietor for personal use were not recorded anywhere, leading to an omission in the books of accounts.
Explanation:
When the proprietor takes goods for personal use, it is considered a withdrawal of goods from the business. This withdrawal needs to be recorded to ensure accurate accounting of the business. However, if the withdrawal is not recorded, it leads to an omission in the books of accounts.
Classification of Error:
The error in the given scenario is an error of omission as a transaction was left out and not recorded in the books of accounts.
Effects of Error:
The effects of an error of omission are:
1. Incorrect financial statements: As the transaction is not recorded, it leads to incorrect financial statements.
2. Misleading financial position: As the transaction is not recorded, it leads to a misleading financial position of the business.
3. Inaccurate decision-making: As the financial statements are incorrect, it leads to inaccurate decision-making by the management.
Conclusion:
In conclusion, errors of omission are a serious issue as they lead to incorrect financial statements, misleading financial position and inaccurate decision-making. It is essential for businesses to ensure that all transactions are recorded accurately to avoid errors of omission.
Errors of Omission occur when a transaction is completely left out or not recorded in the books of accounts. In the given scenario, the goods taken away by the proprietor for personal use were not recorded anywhere, leading to an omission in the books of accounts.
Explanation:
When the proprietor takes goods for personal use, it is considered a withdrawal of goods from the business. This withdrawal needs to be recorded to ensure accurate accounting of the business. However, if the withdrawal is not recorded, it leads to an omission in the books of accounts.
Classification of Error:
The error in the given scenario is an error of omission as a transaction was left out and not recorded in the books of accounts.
Effects of Error:
The effects of an error of omission are:
1. Incorrect financial statements: As the transaction is not recorded, it leads to incorrect financial statements.
2. Misleading financial position: As the transaction is not recorded, it leads to a misleading financial position of the business.
3. Inaccurate decision-making: As the financial statements are incorrect, it leads to inaccurate decision-making by the management.
Conclusion:
In conclusion, errors of omission are a serious issue as they lead to incorrect financial statements, misleading financial position and inaccurate decision-making. It is essential for businesses to ensure that all transactions are recorded accurately to avoid errors of omission.
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Community Answer
Classify the errors :Goods taken away by the proprietor for personal u...
B- because omission refer to left the entry to be recorded both Dr and cr May it help u
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Classify the errors :Goods taken away by the proprietor for personal use not recorded anywhere.a)Errors of commissionb)Errors of omissionc)Errors of principled)Compensating errorsCorrect answer is option 'B'. Can you explain this answer?
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