Accounting Multiple Choice Question – 24 January 2019

An error of principle for a newsagent arises when ……. ?

Select ONE answer:

1. the cost of photocopier purchase on credit is entered on the debit side of the purchases account and on the credit side of the creditor’s account
2. a transaction is not entered at all in the general (nominal) ledger double-entry accounting records
3. a correct figure is entered in the double-entry accounting records, once in the correct ledger account and once in the wrong person’s account
4. two errors are made, one of which cancels out the other

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 1
2 – is an error of omission
3 – is an error of commission
4 – is a compensating error

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