• 1 Marks

FA – Nov 2013 – L1 – SA – Q27 – Correction of Errors

Identifying the type of error when motor repairs are recorded in the Motor Vehicle account.

The amount expended on motor repairs recorded in the Motor Vehicle account is an error of ____________.

Principle

Explanation:
An error of principle occurs when a transaction is recorded in the wrong type of account. In this case, motor repairs should be recorded as an expense rather than being capitalized in the Motor Vehicle account.

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