A sale of Rs 50000 to Mr A was entered as a sale to Mr B This is an example of what ........

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A sale of Rs. 50000 to Mr. A was entered as a sale to Mr. B. This is an example of what?

Error of omission

Error of commission

Compensating error

Error of principle

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Explanation:

- Error of Omission: This occurs when a financial transaction is completely left out or not recorded in the books.

- Error of Commission: This is when a transaction is recorded incorrectly, such as entering the sale under the wrong customer’s name. This fits the scenario provided.

- Compensating Error: These are errors where one mistake is counterbalanced by another leading to a net zero effect on the books.

- Error of Principle: This error involves entering a transaction against the accounting principles, such as recording a capital purchase as a revenue expense.

The correct option is Option: 2 - Error of commission because the sale was recorded under the wrong customer.