Adaobi mistakenly entered ₦7000 as credit sales in Abba's account. This is?
Question 1 Report
Adaobi mistakenly entered ₦7000 as credit sales in Abba's account. This is?
Answer Details
The entry of ₦7000 as credit sales in Abba's account is an error of commission.
An error of commission is an error that occurs when a transaction is recorded in the wrong account, but the debit and credit amounts are still equal. In this case, Adaobi entered the ₦7000 in the wrong account, as credit sales instead of another account, but the total debits and credits still balance.
In contrast, an error of omission occurs when a transaction is not recorded at all, while an error of principle occurs when a transaction is recorded in the wrong category of account (e.g. as an asset instead of a liability).
Finally, a compensating error occurs when two errors are made that cancel each other out, such as an overstatement of an asset and an overstatement of a liability by the same amount.
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