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'Goods sent o...

Question

'Goods sent on approval basis' have been recorded as 'Credit sales'. This is an example of ______________.

A

error of principle

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B

error of commission

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C

error of omission

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D

error of duplication

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Solution

The correct option is A error of principle
Goods sent on approval is not an actual sales hence not to be recorded as sales. This has to be recorded as sale on approval basis, once the confirmation is received for actual sales, than only it has to be considered as credit sale.
Its an error of principle.

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Similar questions

Q. 'Good sent on approval basis' have been recorded as 'Credit sales'. This is an example of

31 s t M a r c h

, goods sold at a sale price of

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Q. On 31st March, goods sold at a sale price of Rs. 30,000 were lying with customer, Mohan to whom these goods were sold on 'sale or return basis' and recorded as actual sales. Since no consent was received from Mohan, the adjustment entry was made presuming goods were sent on approval at a profit of cost plus 20%. In the balance sheet, the stock with customers account will be shown at Rs_________.

Q. Rectifying the error of a credit purchase of goods recorded as credit sale discovered two months later, the entry will be in __________.

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