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Answer -
Errors that are committed when recording of transactions is done against the accounting principle are known as Errors of principle. Here are some examples of the same.
(i) Wages paid for construction of building debited to Wages Account
In this transaction, wages paid for the construction of building is a capital expenditure, so the building account should have been debited. However, it is treated as a revenue expenditure and Wages Account is debited. It is not in accordance with the accounting principle and hence is an error.
(ii) Amount spent on repair of machinery debited to Machinery Account
In this transaction, amount of repair on machinery is a revenue expenditure. It should have been debited as ‘Repairs’, but it is wrongly debited to the Machinery Account which is an error of principle.