Question

i) What is the error of principle? Does it affect the Trial Balance and why? Explain with the

help of an example​

Answer 1

Answer:

ERROR OF PRINCIPAL:

The error of principle means recording the transaction violating the accounting policies and procedures. For Example: treating the purchase of an asset as an expense, this is an error of principle.

EXAMPLE:

treating the purchase of an asset as an expense, this is an error of principle. ... In case of error of principle, there is no effect on the trial balance. This is because the amount is correctly posted on both debit and credit sides but, in incorrect accounts.

Explanation:

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