Question

What is meant by compensating error ?

Answer 1

compensating errors, which compensate themselves in the net results, i.e., over debit of one account is neutralized by an over credit in some other account to the same extent. Similarly, a wrong credit might have been compensated by some wrong debit in some other account.

Because of these errors, the result can create havoc for you during tax season. To protect yourself from such type of errors, hiring an accounting service provider is a beneficial option.

Answer 2

Compensating errors, as the name implies, are errors that compensate for one another. A compensatory error occurs when a sale of Rs 500 to Ram is debited as just Ps 50 to his account, while a sale of Rs 50 to Shyam is debited as Rs 500 to his account.

#SPJ6