Assertion (A): Wages paid for erection of a new plant are debited to Plant and Machinery account. Reason (R): All expenses incurred to bring an asset to its working condition are capitalised. Choose the correct option:
A.Both A and R are true and R is the correct explanation of A.
B.Both A and R are true but R is not the correct explanation of A.
Explanation:
Errors of principle (like treating capital expenditure as revenue) affect debit and credit equally, hence the Trial Balance will still agree.
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