Search answer for your unanswered questions.

Class : 11
Unit : Account


Clarify the meaning of compensating error.

Ans : Compensating error is such type of error, in which the effect of one error is compensating or neutralized by another error. To occur compensating errors, at least two errors are required. Therefore, if the effect of one error is offset by another one or more errors, it is called compensating error. For example, cash received from Manju Rs. 4500 is credited to her account by Rs. 5400 and again cash received from Sanju Rs.5400 is credited to her account by Rs.4500. Here, the first error took place being more by Rs. 900 and again second error took place being less by Rs. 900. The first error is cancelled by the second error.