Question

‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of:

Q: Answer-‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of:

When Goods sent on approval basis are incorrectly recorded as Credit sales, it is an example of an Error of principle. This type of error occurs when a transaction is recorded in a way that violates accounting principles or concepts. In this case, it involves a misunderstanding or misapplication of the accounting principle related to recognizing revenue.