ExpertEasy2 marksMultiple Choice
ACCA · Question 22 · Preparing a trial balance
Which of the following describes an 'error of principle'?
Which of the following describes an 'error of principle'?
Answer options:
A.
Entering a transaction in the wrong personal account
B.
Entering a transaction in the wrong class of account, such as debiting a non-current asset instead of an expense
C.
Omitting a transaction completely from the books
D.
Making a transposition error in the numbers
How to approach this question
Recall the definitions of the different types of errors that do not affect the trial balance.
Full Answer
B.Entering a transaction in the wrong class of account, such as debiting a non-current asset instead of an expense✓ Correct
An error of principle occurs when a transaction is entered into the wrong class of account, violating fundamental accounting principles. A classic example is treating revenue expenditure (like repairs) as capital expenditure (an asset).
Common mistakes
Confusing error of principle with error of commission (wrong account, but correct class).
Practice the full ACCA FA — Financial Accounting Practice Exam 2
65 questions · hints · full answers · grading
More questions from this exam
Q01BioGenix Ltd, a biotech startup, is deciding whether to disclose a highly uncertain contingent li...EasyQ02Which of the following bodies is primarily responsible for issuing International Financial Report...EasyQ03Which of the following are the primary responsibilities of the directors of a limited liability c...MediumQ04Titanium Forge Co, a heavy manufacturing firm, recently incurred the following costs:
1. $50,000 ...MediumQ05A company makes a 1 for 4 bonus issue of shares. The nominal value of the shares is $1. The compa...Medium