Question

Office was renovated and renovation charges were 5000. They were put in purchase book account. It is ___________.

• A. error of complete omission
• B. error of principle
• C. error of commission
• D. all of the above

Answer 1

The correct option is B error of principle

If fundamental accounting rules are not followed while doing the accounting, there is an error of principle. For example, capital expenditure are debited as revenue expenditure.

Office renovation cost have to capitalized and not to be debited to purchase account. This is an error of principle. This has to be rectified by passing the below entry:

Office renovation Dr. 5000

To Purchases A/c 5000