PRC-1 · Chapter 8 · Question 77 of 100
Purchase of fuel for the company car is capitalized to motor vehicles. It is a type of:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Error of principle
Explanation
Capitalizing a running expense (revenue expenditure) as a non-current asset violates the fundamental principles of accounting, making it an error of principle.
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