Which of the following is not an error of principle:
Explanation
Option (C) is the correct answer because it is an Error of Commission, not an Error of Principle.
According to the context, an Error of Principle occurs when accounting principles are violated, specifically due to an incorrect classification of expenditure or receipt between capital and revenue. For example, treating a capital expenditure like furniture as a revenue purchase.
In contrast, Option (C) describes cash received from Manoj being posted to Saroj's account. The context defines errors arising from wrong posting of transactions as Errors of Commission. Since this error involves a posting mistake to the wrong account rather than a violation of capital/revenue classification, it is not an error of principle.
Solution Steps
Step 1: Identify the definition of Error of Principle from the text: It involves the violation of accounting principles, specifically incorrect classification between capital and revenue items.
Step 2: Analyze Option (C): 'Cash received from Manoj posted to Saroj'. This is a case of wrong posting to an individual's account.
Step 3: Relate the analysis to Errors of Commission: The text states that errors committed due to 'wrong posting of transactions' fall under Errors of Commission.
Step 4: Conclude that since Option (C) is a posting error (Commission) and not a classification error regarding capital/revenue (Principle), it is the correct answer.