State whether the following statements are True or False:
Errors committed due to lack of accounting knowledge are errors of omission.

True

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False

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Solution

The correct option is B False
Accounting entries are recorded as per the generally accepted accounting principles. If any of these principles are violated or ignored, errors resulting from such violation are known as errors of principle. It occurs due to wrong application of the Generally Accepted Accounting Principles (GAAP). The accounting personnel who are lacking the knowledge of principles and practices of accounting may record the transactions against these principles. An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue. This is very important because it will have impact on financial statements. Hence, errors committed due to lack of accounting knowledge are errors of principle.

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Similar questions

State whether the following statements are True or False-

1) A trial balance can agree in spite of certain errors.
2) Errors committed due to lack of accounting knowledge are errors of omission.
3) Trial balance is prepared from the balance of ledger accounts.
4) Rectification entries are passed in cash book.
5) Single sided errors affect only one account.
6) Suspense account is automatically closed after rectification of all errors.
7) Errors affecting the agreement of trial balance are called on side errors.
8) There is no need to open a suspense account if the trial balance agrees.
9) All the errors can be rectified only through suspense account.
10) Compensating errors affect the agreement of trial balance.

Q. State whether the following statement is True or False:-
Single sided errors affect only one account.

Q. State whether the following statement is True or False:-
Suspense account is automatically closed after rectification of all errors.

Q. State with reasons whether the following statement is true or false:
If the amount Is posted in the wrong account or it is written on the wrong side of an account it is called error of omission.

If, after preparation of financial statements of a firm, it is found that some errors or omission in accounts has occurred, then such errors or omissions are rectified in the next year by passing ___

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State whether the following statements are True or False:Errors committed due to lack of accounting knowledge are errors of omission.

State whether the following statements are True or False:
Errors committed due to lack of accounting knowledge are errors of omission.