Answer-The error of principle occurs when:

An error of principle occurs when a transaction is recorded in violation of accounting principles, such as treating a capital expenditure as a revenue expenditure e.g., charging machinery repairs to the Machinery account.

Question

The error of principle occurs when:

A A transaction is completely omitted from the books.

B A transaction is recorded in the wrong subsidiary book.

C A fundamental accounting principle is violated.

D There is a mistake in posting to the correct ledger account.

E The trial balance does not tally.

Practice Next

More Forming base to Accounts Questions

Which accounting principle states that revenue should be recognized in the accounting period in which it is earned?
Which of the following is a "Capital Expenditure"?
Inflation caused by an increase in the prices of inputs (e.g., wages, oil) is called:
"Window Dressing" in accounting refers to:
A company purchases machinery for ₹10 lakhs and incurs ₹1 lakh on its installation. The accountant records the total ₹11 lakhs under the fixed asset head. ...
The "Matching Principle" requires that:
XYZ Ltd. incurred R&D expenses of ₹20 lakhs for developing a new product. The product has not yet reached the commercialisation stage. How should the amoun...
Which accounting principle/concept states that revenue should be recognized when it is earned, regardless of when cash is received?
An enterprise follows accrual basis of accounting and records revenue when it is earned and expenses when incurred. A client makes an advance payment of ₹1...
Gross Domestic Product (GDP) is defined as the total value of all:

Hey! Ask a query

The error of principle occurs when:

Detailed Solution

More Forming base to Accounts Questions

Hey! Ask a query

Please Register/Login