Multiple choice

Which of the following errors is an error of principle?

  1. Total sales figure was taken as Rs. 19,373 instead of Rs. 19,733.

  2. A discount of Rs. 30 avowed to Mr. A was not recorded in the discount allowed account.

  3. Legal charges for acquisition of building for Rs. 500 were entered in the Legal Expenses Account.

  4. Rs. 1,000 received from Mr. X was posted to the credit of Mr. M.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Correct Answer: When a revenue item is shown as capital item and vice versa, it is error of principle.

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