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Tom [10]
3 years ago
14

A company's financial statements may contain errors even if debits and credit balance because:

Business
1 answer:
emmasim [6.3K]3 years ago
6 0

Answer:

B. correct but equal amounts may have been posted to wrong accounts

Explanation:

It is possible that in the presence of the errors the debits and credits side remains balance.

Following errors may balance the debits and credits

  • Error of omission ( Transaction is totally omitted)
  • Error of commission (posting in wrong accounts by same value)
  • Error of Principle (Entry made against the principle of accounting)
  • Error of Original Entry (Wrong amount posted on both debit and credit sides)
  • Compensating error (Two errors compensate each others effect)

All of the above errors may present in case of balanced debit and credit sides.

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