Multiple choice

Which of the following is an example of the error of principle?

  1. A sum of Rs. 12,000 spent on the extension of a building was debited to building repairs A/c

  2. A sum of Rs. 2,000 received from S & Co. has been entered as received from R & Co.

  3. Machinery was purchased for Rs. 1,00,000 but the transaction was not recorded

  4. Rahul's A/c debited with Rs. 1,500 instead of Rs. 1,200 and Vijay's A/c debited with Rs. 1,700 instead of Rs. 2,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Here capital expense is treated as a revenue expense and this is because of wrong application of accounting princples.

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