Accounting statements rarely report financial information without errors. List three typesof errors that can arise in financial reporting and explain. (3 marks

Transposition Errors: These occur when two digits within a number are swapped (or transposed). For example, if the correct number is 64 and it is entered as 46, this is a transposition error. This type of error can significantly alter the financial figures and lead to misinterpretation of the company's financial health.

Error of Omission: This type of error occurs when a financial transaction is completely omitted from the accounting records. For instance, if a sale is made but not recorded in the sales journal, this would be an error of omission. This can lead to understatements or overstatements of income or expenses, and thus distort the true financial position of the company.

Error of Commission: This type of error occurs when an item is entered in the correct amount and the correct side of the ledger but in the wrong account. For example, if a cash sale is recorded as a credit sale, this would be an error of commission. This can also lead to misrepresentation of the company's financial position and performance.