` 500 paid as cartage on new Plant and Machinery, this was debited to Carriage Inward A/c. This is an error of-

Name: ` 500 paid as cartage on new Plant and Machinery, this was debited to Carriage Inward A/c. This is an error of-
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The error is of principle because the cost related to the acquisition of new Plant and Machinery (an asset) was incorrectly recorded in an expense account (Carriage Inward A/c) instead of being capitalized as part of the asset's cost.

` 500 Paid as Cartage on New Plant and Machinery