BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A transaction that incorrectly uses an accounting principle is called an error of principle. Errors of principle don’t meet the generally accepted accounting principles (GAAP). It’s also called an “input error” because, though the number is correct, it’s recorded in the wrong account.

Detailed explanation-2: -Error of principle Usually, this happens when an entry is made in the wrong account. The amount is correct but is simply entered in the wrong place. An error of principle is a serious procedural mistake because it can have big consequences.

Detailed explanation-3: -What are the 4 types of accounting errors? Most accounting errors can be classified as data entry errors, errors of commission, errors of omission and errors in principle.

Detailed explanation-4: -Errors of principle are those errors which are committed at the time of recording transactions against the accounting principle.

Detailed explanation-5: -Repairs to machinery is debited to machinery account instead of debiting to repairs and maintenance account i.e. it is treated as capital expenditure instead of revenue expenditure hence it is error of principle.