What is meant by errors of principle?

Asked by Topperlearning User | 26th Jul, 2016, 01:33: PM

Expert Answer:

Generally accepted accounting principles are to be followed to record the accounting entries. When accounting entries are recorded in contravention of accounting principles, it is known as an error of principle. For example, installation charge of Rs.600 for new machinery debited to trading account; this installation charge is a capital expenditure, and hence it should be debited to the machinery account.

Answered by  | 26th Jul, 2016, 03:33: PM