Question

Counterbalancing errors do not include

a. errors that correct themselves in two years.
b. errors that correct themselves in three years.
c. an understatement of purchases.
d. an overstatement of unearned revenue.

Answer 1

Counterbalancing errors in accounting do not include errors that correct themselves in two or three years, an understatement of purchases, or an overstatement of unearned revenue.

Step-by-step explanation:

Counterbalancing errors in accounting refer to mistakes that offset each other, resulting in correct financial statements. They do not include:

1. Errors that correct themselves in two years. These are not counterbalancing errors as they are not self-correcting within the same accounting period.
2. Errors that correct themselves in three years. Similar to the previous option, these errors do not offset each other during the same accounting period.
3. An understatement of purchases. An understatement is an error that leads to an understated balance, and it is not a type of counterbalancing error.
4. An overstatement of unearned revenue. An overstatement is an error that results in an overstated balance, and it is not a type of counterbalancing error either.