CIMA BA3 · Chapter 7 · Question 1 of 10
The cost of a new delivery van was debited to the motor expenses account. What type of error is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Error of principle
Explanation
An error of principle records a transaction in the wrong class of account; here capital expenditure has been treated as revenue expenditure. The trial balance still agrees because equal debits and credits were made.
More Errors, the trial balance and suspense accounts MCQs
- Q3Which of the following errors would cause the trial balance totals to disagree?
- Q4A trial balance has debit totals of $214,300 and credit totals of $216,110. A suspense account is opened to make it balance. What is the…
- Q5A suspense account was opened when a trial balance did not agree. The following errors were then found, and these explain the whole…
- Q6A machine costing $12,000 was debited to the repairs account. Which journal entry corrects the error?
- Q7A company's draft profit for the year is $45,600. It is then found that closing inventory was understated by $3,000 and an accrual for…