Electrical Machines
Compensating windings are used in DC generators

  to neutralize the cross magnetizing effect of the armature reaction.
None of these
  mainly to reduce the eddy currents by providing local short circuit.
  to provide path for the circulation of cooling air.

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Electrical Machines
In a transformer

 both OC and SC tests are conducted on LV side
 OC test is conducted on LV side and SC test is conducted on HV side
 OC test is conducted on HV side and SC test is conducted on LV side
 both Oc and SC tests are conducted on HV side

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