Question

Answer in one sentence only :-

What is an error of principle?

Answer 1

When a fundamental principle of accounting is violated, while recording a transaction, it is known as an error of principle. For example: -
1. Purchase of furniture is debited to the Purchases A/c instead of Furniture A/c.
2. Repairs of old machinery are debited to the Machinery A/c instead of Repairs A/c.