PRC-1 · Chapter 3 · Question 93 of 100
A business spent Rs. 10,000 on routine repairs for a machine and debited the Machinery (asset) account. What type of error is this?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Error of principle
Explanation
Debiting an asset account instead of an expense account violates fundamental accounting principles (capital vs. revenue expenditure), making it an error of principle.
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