COMPENSATING ERROR Definition

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COMPENSATING ERROR is the name given to the situation where one mistake cancels out the effect of a second mistake.

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OVERHAUL is to rebuild, make repairs or adjustments to, e.g. an overhaul expense would be the expenditures incurred in making the subject item(s) acceptable once again.

ADJUSTMENT can be either: 1. an increase or decrease to an account resulting from ADJUSTING ENTRIES; or, 2. changing an account balance due to some event, e.g., adjustment of an account due to the return of merchandise for credit.

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