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Question
XYZ purchased trading goods worth Rs.50,000. This was capitalized along with Plant and Machinery A/c. This is an error of __________.
XYZ purchased trading goods worth Rs.50,000. This was capitalized along with Plant and Machinery A/c. This is an error of __________.
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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.
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.
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