An 'Error of Principle' occurs when: MCQ with Answer and Explanation

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An 'Error of Principle' occurs when:

A. Wrong amount is posted

B. A transaction is completely omitted

C. A capital expenditure is treated as revenue expenditure

D. Posting to wrong personal account

Answer: Option C

Solution (By JKSSB Mock Tests)

Error of principle violates accounting principles, e.g., incorrect classification between capital and revenue.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1

While preparing a Bank Reconciliation Statement, a cheque deposited but not yet cleared is:

A. Added to the cash book balance

B. Added to the bank statement balance

C. Deducted from the cash book balance

D. Deducted from the bank statement balance

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Correct Answer: Option B

Explanation:
When starting from bank statement (pass book) balance, a deposit in transit must be added because it's not yet reflected in the bank statement.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

A Trial Balance is prepared primarily to check the:

A. Arithmetical accuracy of ledger accounts

B. Financial position of the business

C. Liquidity of the firm

D. Profitability of the business

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Correct Answer: Option A

Explanation:
Trial Balance lists all debit and credit balances to ensure total debits equal total credits, verifying mathematical accuracy.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The 'Tax Collected at Source' (TCS) applies to:

A. Dividends

B. Certain specified transactions like sale of scrap, motor vehicles above ₹10 lakh, etc.

C. All payments

D. Salary payments

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Correct Answer: Option B

Explanation:
TCS is collected by seller from buyer on specified goods.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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