A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of _
Options:
a) Error of omission b) Error of commission c) Compensating error d) Error of principle |
The Correct Answer Is:
b) Error of commission
The correct answer is b) Error of commission.
Explanation:
An error of commission occurs when a transaction is recorded incorrectly due to some action being taken, but the action is not in accordance with the standard accounting procedures. In this case, a sale of Rs. 50,000 to customer A was mistakenly recorded as a sale to customer B.
This is an example of an error of commission because an action (recording the sale) was taken, but it was done incorrectly, deviating from the standard accounting practice.
The mistake in recording the sale to the wrong customer constitutes a commission error because it involves an incorrect action, rather than an omission or a principle-related error.
Why the other options are not correct?
Now, let’s delve deeper into why the other answer options are not correct:
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