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 _________.

Commission

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Ommission

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Principle

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Clerical error

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Solution

The correct option is C Principle
When a capital expenditure is wrongly debited as revenue expenditure, this is an error of principle. Amount spent on purchasing of machinery including all incidental expenses till the machine is ready for out to use, to be debited to machinery account.
$R s .500$ spent for wages on purchase of machinery wrongly debited to wages account is an error of principle.

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Similar questions

Q. 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 ________.

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?

Rectify the following errors:-

1) Purchase of Building was passed through purchases Book as Rs 65,000.
2) Wages paid for construction of building Rs 15,000 was wrongly debited to wages account.
3) Expense of installation of Machinery was debited to installation charges account Rs 55,000.
4) Brokerage paid Rs 600 for purchase of investment were debited to brokerage account.
5) Old Motor car purchased was debited to repairs account Rs 7,000.
6) Materials purchased for construction of Building was debited to purchases account Rs 9,000.

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

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 _________.