Q.Wages paid for installation of machinery wrongly debited to wages account is an error of ________.

Debiting installation wages to Wages A/c instead of Machinery A/c wrongly treats capital expenditure as revenue expenditure — an error of principle (option d).

Reasoning:

• Wages paid to install machinery are part of the cost of bringing the asset to working condition, so they are capital expenditure and should be debited to the Machinery account.
• Debiting them to the ordinary Wages account treats them as a revenue expense — this breaks the rule for distinguishing capital and revenue items, i.e. a fundamental accounting principle. …