ABC Co. Ltd purchase a furniture of Rs.50000/- has been debited to purchase a/c It is error of principle.

A. true

B. false

Answer: Option A

Solution(By Examveda Team)

Error of principle - a transaction that is not in accordance with generally accepted accounting principles ( GAAP). One example of an accounting error of principle is an expenditure that is placed in an inappropriate category.
Purchase a furniture of Rs.50000/- is to be debited to fixed assets a/c