Question
Give two examples of compensating errors.

Answer

Compensating Errors: If the effect of one error is neutralised by the effect of some other error, such errors are called compensating errors. For example, while posting on the debit side of Anil's account, ₹ 50 are posted instead of ₹ 500 and while posting on the debit side of Sunil's account ₹ 500 are posted instead of ₹ 50. These two msitakes will nullify the effect of each other and in spite of the errors in both the accounts, Trial Balance will still agree.

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