passwella.
Menu

JAMB Principles of Accounts 1994 Question 8

Question 8

Correction of Errors and Suspense Account

Malam Gambo bought a freezer for his shop costing ₦10 500. In recording, he debited office expenses account and credited the bank account. What book-keeping error has he committed?

  1. A.Error of commission
  2. B.Error of reversal of entries
  3. C.Error of principle
  4. D.Compensating error.
Show the answer and explanation

Answer: C (Error of principle)

Explanation

A freezer is a fixed asset; debiting it to an expense account puts it in the wrong class of account, which is an error of principle.