Compensating errors offset each other in trial balance totals

Steps:

• Recall compensating error definition: two or more errors of equal magnitude but opposite effect that cancel out without impacting trial balance.
• Review options for pairs of offsetting mistakes.
• Check D: wages undercast by $100 and rent overcast by$100, netting zero impact.
• Eliminate non-offsetting single errors in A, B, C.

Why D is correct:

• Compensating errors occur when one error's debit/credit imbalance is neutralized by another's equal opposite imbalance, per accounting error classification, leaving trial balance unaffected as in D's $100 under/over casts.

Why the others are wrong:

• A: Error of principle (misclassification of expense as asset).
• B: Error of transcription (incorrect amount entry).
• C: Error of identity (wrong account credited).

Final answer: D