Question

What is meant by Errors of principal?​

Answer 1

Answer:

Errors of principle are often simply accounting entries recorded in the incorrect account. The amounts are often correct, unlike an error of original entry. Oftentimes, the error of principle is a procedural error, meaning that the value recorded is correct but the entries are made in the wrong accounts.

Answer 2

ANSWER :

❖The term "Errors of Principles" refers to the error occurs when some fundamental principle(s) of accountancy is violated while recording a transaction in the books of accounts.

• ✎ Errors of principles are committed in those cases where a proper distinction between capital and revenue items is not made. That means a capital expenditure is treated as a revenue expenditure or revenue expenditure is treated as a capital expenditure.

• ✎ The existence of errors of priciples are not usually disclosed by the trial balance. It means these errors donot affect thr agreement of the Trial Balance.

❒ Errors of priciples may be of the following types :-

• (i) When a capital expenditure is treated as a revenue expenditure

• (ii) When a revenue expenditure is treated as a capital expenditure

• (iii) When recording of transactions is made in a wrong head of account