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JAMB Principles of Accounts 2005 Question 7

Question 7

Correction of Errors and Suspense Account

Mr. Bassey purchased a motor vehicle for use in his business and debited the purchases account with the same value. This is an error of

  1. A.omission
  2. B.principle
  3. C.commission
  4. D.original entry
Show the answer and explanation

Answer: B (principle)

Explanation

A fixed asset was entered as if it were goods for resale: the wrong class of account, which is an error of principle.