Virtual University of Pakistan Study forum !
Topic to be tested:
Mr. Arif is running his small retail business under the name of Arif Store. He has recently hired Mr. Hamid as a junior accountant to maintain the books of accounts of his business. Mr. Hamid has little knowledge in accounting. Recently, it has been observed that Mr. Hamid wrongly capitalized an amount of Rs. 10,000 paid for repair of business equipment. As a result, financial statements failed to reflect true and fair business affairs.
Note: Be concise and avoid unnecessary detail to attempt the given questions.
Error of principle
ONLY 4 LINE IS THE ANSWWER CUTE SAQMRA
g Sir Dilawar
Mgt 101 gdb solution
1.error of principle
2-capital account is over stated; repair expense account is under stated
But overall trial balance is not effected.
3-materially misstated(refrence link. http://www.accountingcoach.com/accounting-principles/explanation)
4-after correcting the enteries