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Class : 11
Unit : Account

Write the meaning of errors of principle with suitable examples.

Ans : If a transaction is recorded in the book of accounts against the fundamental principle of double entry book-keeping, the error is known as an error of principle. For example, if an income is treated as a liability or vice-versa or if an expense is treated as an assets or vice-versa, then these errors are errors of principle. These errors will not affect the agreement of the trial balance.
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