PRC-1 · Chapter 6 · Question 81 of 100
Which of the following actions constitutes an 'Error of Principle' regarding Property, Plant, and Equipment?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Recording the purchase of a new delivery van in the 'Motor Expenses' account.
Explanation
An error of principle occurs when an entry violates fundamental accounting principles, such as recording a capital expenditure (asset purchase) as a revenue expenditure (expense).
More Property, Plant and Equipment MCQs
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