An entry of Rs. 500 was wrongly posted to wages account instead of machinery account, as wages are to be capitalised. It is an error of ________.

Commission

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Omission

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Principle

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Clerical error

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Solution

The correct option is C Principle
Error of principle is defined as an accounting error violating the basic principles of accounting. Its a procedural error where amount are correctly recorded but basic principles are avoided. Recording of wages as expenses instead of posting it to machinery account will therefore be termed as error of principle.

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Similar questions

Q. An entry of

R s .500

was wrongly posted to wages account instead of machinery account, as wages are to be capitalized. It is an error of _________.

Q. Wages paid for installation of machinery wrongly debited to wages account is an error of __________.

Trial balance of Radhika did not agree. Radhika put the difference to suspense account. subsequently she located the following errors.

1) Furniture purchased for Rs 6,000 was posted to purchases account as Rs 600.
2) Repairs to Machinerry Rs 500 were debited to Machinery account.
3) Wages paid for installation of Machinery Rs 750 was posted to wages account.
4) Purchased material Rs 8,000 and wages Rs 2,000 were used for construction of building not recorded in the books.
5) Total of sales returns book Rs 2,000 was not posted to the ledger.
6) Old Furniture sold to Dinesh at its book value of Rs 2,500 was recorded through sales book.

Q. Wages paid for installation of machinery Rs

2, 750

had been debited to wages account as Rs

5, 250

. If this error located after preparation of final account then which of the following rectification entry is correct?

Q. Rectify the following errors:-
1. ₹ 4,500 spent on the extension of Buildings were debited to Repairs A/c.
2. Wages paid to the firm's own workmen ₹ 3,600 for the installation of a new machinery were posted to Wages Account.
3. Contractor's bill for the construction of a godown at a cost of ₹ 10,000 has been charged to 'Repairs' A/c.
4. ₹ 1,500 paid as Wages to a worker 'Bahadur Singh', has been debited to his personal account.
5. Old furniture sold for ₹ 500 has been credited to Sales Account.
6. A cheque of ₹ 620 received from Ram, has been wrongly credited to Shyam.

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