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An entry of Rs. 500 was wrongly posted to wages account instead of plant and machinery account, as wages
are to be capitalized. It is an error of :
Commission
Omission
Principle
Clerical error
- Commission Error: Occurs when an entry is recorded but in the wrong account of the same classification; hence, not applicable here.
- Omission Error: Happens when a transaction is completely omitted, which is not the case here as the entry was recorded.
- Principle Error: Occurs when entries are made violating accounting principles such as classifying capital and revenue. In this situation, wages should be capitalized, but were posted differently.
- Clerical Error: Involves mistakes like incorrect figures, but doesn't apply here as the focus is incorrect account classification.
- Correct Answer: Option 3 - Principle
By: santosh ProfileResourcesReport error
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