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Classify the errors : Repairs of newly purchased second hand machinery debited to repairs accounts. 
  • a)
    Errors of commission
  • b)
    Errors of omission
  • c)
    Errors of principle
  • d)
    Compensating errors 
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Classify the errors :Repairs of newly purchased second hand machinery ...
Errors of principle

Errors of principle occur when a transaction is recorded against an incorrect account due to a fundamental misunderstanding of accounting principles. In the given scenario, repairs of newly purchased second-hand machinery have been debited to repairs accounts. This is an error of principle because the transaction has been recorded in the wrong account due to a misunderstanding of the accounting principle that capital expenditures should be recorded as assets and not expenses.

Breaking down the answer:

- Errors of principle: Explanation of the type of error that has occurred.
- Occurrence in the given scenario: How the error has occurred in the given scenario.
- Reason for the error: The fundamental misunderstanding of accounting principles that has led to the error.
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Classify the errors :Repairs of newly purchased second hand machinery debited to repairs accounts.a)Errors of commissionb)Errors of omissionc)Errors of principled)Compensating errorsCorrect answer is option 'C'. Can you explain this answer?
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