XYZ purchased trading goods worth Rs.50,000. This was capitalized along with Plant and Machinery A/c. This is an error of __________.
A
principle
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B
omission
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
commission
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
compensating
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution
The correct option is B principle When an accounting transaction is passed by not following the fundamental rule of accounting, its an error of principle.
Purchase of trading goods worth Rs.50000 has to be debited to purchases account , not to the plant & machinery account. This is an error of principle.