An Error of Commission Arises When

question 49

Multiple Choice

An error of commission arises when:

• A) A transaction is completely missed out.
• B) A transaction is posted to the correct type of account (income, expense, asset, liability or capital) but the wrong account is debited or credited.
• C) Two or more errors cancel each other out.
• D) Transactions are posted to the correct accounts, but the debit and credit entries are reversed.

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Definitions:

Wage Rate

The fixed amount of compensation or payment provided to an employee by an employer in return for work performed, typically expressed per hour or year.

Utility Maximizer

An individual or entity that seeks to achieve the highest level of satisfaction possible from their consumption choices, given their resources.

Net Seller

An individual or entity that sells more than it purchases in a given market, often resulting in a net inflow of funds.

Net Buyer

An entity or individual that purchases more of a commodity or asset than they sell in a specific period.