PRC-1 · Chapter 8 · Question 88 of 100
An error where a transaction is entered in the wrong class of account (e.g., an asset account instead of an expense account) is called an:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Error of principle
Explanation
Errors of principle involve breaching fundamental accounting principles, such as mixing up capital and revenue items.
More Correction of Errors MCQs
- Q90The total of the purchases day book was overcast by Rs. 2,500. How is this error corrected?
- Q91A credit sale of Rs. 4,800 to Zaid was recorded in the sales day book as Rs. 8,400. What is the correcting journal entry?
- Q92The sales return day book was overcast by Rs. 1,200. What is the correcting journal entry?
- Q93A discount received of Rs. 600 was omitted from the Discount Received account in the general ledger, although it was correctly entered in…
- Q94Bank charges of Rs. 300 were completely omitted from the books. How does this affect the financial statements before correction?
