Question

$Rs.5000$ paid as cartage on new Plant and Machinery. This was debited to carriage inward A/c. This is an error of __________.

• A. principle
• B. omission
• C. commission
• D. compensating

Answer 1

The correct option is A principle

When an accounting transaction is passed by not following the fundamental rule of accounting, its an error of principle.

$Rs.5000$ paid as cartage on new plant & machinery has to be debited to Plant & Machinery Account.