If machinery account is debited with repair charges it is an error of
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Error of Principle
It Is an error occurring due to wrong application of basic Accounting Principles. The main reason behind such an error is incorrect classification of capital and revenue items.
For example, purchase of an Asset may be recorded through the Purchase day book instead of debiting the Asset account. Or wages paid for the installation of an asset may be debited to the wages account instead of debiting the asset account with the amount of wages.
An error of principle will not affect the agreement of a trial balance. However, it will result in misrepresentation of the state of affairs and operational results of a business.
I HOPE IT WILL HELP YOU. . .
It Is an error occurring due to wrong application of basic Accounting Principles. The main reason behind such an error is incorrect classification of capital and revenue items.
For example, purchase of an Asset may be recorded through the Purchase day book instead of debiting the Asset account. Or wages paid for the installation of an asset may be debited to the wages account instead of debiting the asset account with the amount of wages.
An error of principle will not affect the agreement of a trial balance. However, it will result in misrepresentation of the state of affairs and operational results of a business.
I HOPE IT WILL HELP YOU. . .
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