S1: Vouching checks the arithmetical accuracy of the books. S2: Vouching checks the authenticity of the transactions. Which statement(s) is/are correct?
Explanation:
Vouching is the examination of documentary evidence to verify the authenticity and accuracy of transactions, not their arithmetical accuracy (which is checked by the Trial Balance). S1 is incorrect, S2 is correct.
Explanation:
Compensating errors cancel each other's effect on trial balance totals, so the trial balance still agrees. Errors of casting, posting one side, wrong totaling will cause disagreement.
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