Error of principle
An error of principle occurs when a transaction is recorded in an account of the wrong accounting category, such as treating a capital item as an expense. The double entry can still balance. The correcting entry debits the asset account and credits repairs, assuming the purchase qualifies for capitalisation.
Worked example
A machine purchase is debited to repairs expense instead of equipment.
Common mistake
Assuming equal debits and credits prove expenses and assets were classified correctly.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |