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    Question

    โ€˜Goods sent on approval basisโ€™ have been recorded as

    โ€˜Credit salesโ€™. This is an example of:
    A Error of principle Correct Answer Incorrect Answer
    B Error of commission Correct Answer Incorrect Answer
    C Error of omission Correct Answer Incorrect Answer
    D Error of duplication Correct Answer Incorrect Answer

    Solution

    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.

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