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CMA Foundation · Fundamentals of Financial and Cost Accounting · Adjustment Entries and Rectification of Errors

Goods worth ₹8,000 sold to Mehta Traders were correctly entered in the Sales Book but were never posted to Mehta Traders' account in the ledger. Which type of error is this?

It is an error of omission, because the sale was recorded in the Sales Book but the posting to the customer's ledger account was left out. The treatment itself is correct, so it is not an error of principle, and nothing offsets it, so it is not compensating.

  1. AError of omission (partial, posting omitted)Correct
  2. BCompensating error
  3. CError of commission by wrong account
  4. DError of principle

Explanation

The transaction was recorded in the subsidiary book but one side of the posting to the personal account was left out. This is an error of omission. It is not a principle error because the accounting treatment is correct, and it is not a compensating error because no offsetting error exists.

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