Question 1

Section A

A cross-border logistics firm, TransGlobal, discovered that a payment of $4,500 for vehicle repairs was incorrectly debited to the Vehicles (Asset) account. The credit entry to the bank was correct. What is the name of this type of accounting error?

Accepted Answer

Identify the nature of the mistake: an expense (repairs) was recorded as an asset (vehicles). This violates a fundamental accounting principle.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

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

Section A

A cross-border logistics firm, TransGlobal, discovered that a payment of $4,500 for vehicle repairs was incorrectly debited to the Vehicles (Asset) account. The credit entry to the bank was correct. What is the name of this type of accounting error?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA FA — Financial Accounting Practice Exam 6

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