Which of the following describes an 'error of principle'?

Answer options:

Entering a transaction in the wrong personal account

Entering a transaction in the wrong class of account, such as debiting a non-current asset instead of an expense

Omitting a transaction completely from the books

Making a transposition error in the numbers

How to approach this question

Recall the definitions of the different types of errors that do not affect the trial balance.

Full Answer

B.Entering a transaction in the wrong class of account, such as debiting a non-current asset instead of an expense✓ Correct

An error of principle occurs when a transaction is entered into the wrong class of account, violating fundamental accounting principles. A classic example is treating revenue expenditure (like repairs) as capital expenditure (an asset).

Common mistakes

Confusing error of principle with error of commission (wrong account, but correct class).

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Practice the full ACCA FA — Financial Accounting Practice Exam 2

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