WAEC Accounting 2014 Paper

Concept:When two errors of equal amount affect accounts in opposite directions, they cancel each other out.Such errors are known as compensating errors.Explanation:The purchase account is overcast by $\text{N}200$, so its debit side is $₦200$ more than it should be.The wages account is undercast by $\text{N}200$, so its debit side is $\text{N}200$ less than it should be.Both accounts are debit balances, but the overcasting increases total debits while the undercasting decreases total debits by the same amount.Thus, the two mistakes neutralise each other and the trial balance remains correct.This is not an error of omission, commission, or principal because the errors are equal and opposite in effect.Answer:B. A compensating error.