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Which of the following is not an error of principle
- a)Purchase of furniture debited to purchase account
- b)Repair or the over hauling of machinery purchased debited to repairs account
- c)Cash paid to Karan posted to salary
- d)Sale of old car credited to sales account
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Which of the following is not an error of principlea)Purchase of furni...
Not an Error of Principle: Cash paid to Karan posted to salary
Explanation:
An error of principle occurs when a transaction is recorded in the wrong account due to a fundamental error in accounting principles. The following options are errors of principle:
a) Purchase of furniture debited to purchase account - This is an error of principle because furniture is a fixed asset, and it should be debited to the furniture account, not the purchase account.
b) Repair or the overhaul of machinery purchased debited to repairs account - This is an error of principle because the repair of machinery is a capital expenditure, and it should be debited to the machinery account, not the repairs account.
d) Sale of old car credited to sales account - This is an error of principle because the sale of a fixed asset should be credited to the fixed asset account, not the sales account.
c) Cash paid to Karan posted to salary - This is not an error of principle because cash paid to an employee is a salary expense, and it should be debited to the salary account.
Conclusion:
The correct answer is option 'C'.
Explanation:
An error of principle occurs when a transaction is recorded in the wrong account due to a fundamental error in accounting principles. The following options are errors of principle:
a) Purchase of furniture debited to purchase account - This is an error of principle because furniture is a fixed asset, and it should be debited to the furniture account, not the purchase account.
b) Repair or the overhaul of machinery purchased debited to repairs account - This is an error of principle because the repair of machinery is a capital expenditure, and it should be debited to the machinery account, not the repairs account.
d) Sale of old car credited to sales account - This is an error of principle because the sale of a fixed asset should be credited to the fixed asset account, not the sales account.
c) Cash paid to Karan posted to salary - This is not an error of principle because cash paid to an employee is a salary expense, and it should be debited to the salary account.
Conclusion:
The correct answer is option 'C'.
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Community Answer
Which of the following is not an error of principlea)Purchase of furni...
As we know that,
An error of principle is an accounting mistake in which an entry violates a fundamental principle of accounting or a fundamental accounting principle established by a company.
Hence,in option c it's a error of omission.
An error of principle is an accounting mistake in which an entry violates a fundamental principle of accounting or a fundamental accounting principle established by a company.
Hence,in option c it's a error of omission.
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Which of the following is not an error of principlea)Purchase of furniture debited to purchase accountb)Repair or the over hauling of machinery purchased debited to repairs accountc)Cash paid to Karan posted to salaryd)Sale of old car credited to sales accountCorrect answer is option 'C'. Can you explain this answer?
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