When an error in a particular account gets compensated with another error occurring in a different account simultaneously, then it is termed as compensating error. For instance, let us say, while posting one the debit side of account A, we post Rs.100 in place of Rs.1000. On the other hand, while posting on the debit side of account B, Rs.1000 is posted on the place of Rs.100. These are two crucial mistakes that turn each other’s effect to be void, and therefore instead of being two errors, it will satisfy the terms of the trial balance.