Question

Purchase of office furniture of Rs. 1,200 has been debited to general expense account. It is __________.

• A. a clerical error
• B. an error of principle
• C. an error of omission
• D. a compensating error

Answer 1

The correct option is B an error of principle

An error which violates the fundamental accounting principles is an error of principle.

In the given question, capital expenditure is treated as revenue expense. It shows that the basic classification of capital and revenue expenditure is violated. Such an error is therefore an error of principle.