[Solved] Undervaluation of stock is

Undervaluation of stock is

a) Technical error

b) Compensatory error

c) Error of principles

d) None of the above

Answer: (c) Undervaluation of stock is error of principles. Errors of principle are often simply accounting entries recorded in the incorrect account. The amounts are often correct, unlike an error of original entry. Oftentimes, the error of principle is a procedural error, meaning that the value recorded is correct but the entries are made in the wrong accounts.

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