2. Principalprinciple

Don't bother with that "The principal is your pal" stuff, because that's not the usage that trips students up. In terms of what causes problems, principal is an adjective meaning "foremost" or "most important," while principle is a noun meaning "fundamental law" or "guiding idea."

WRONG RIGHT
Grand Forks Industrial Works was founded in 1917 on the basic business principals of honesty and quality.
Grand Forks Industrial Works was founded in 1917 on the basic business principles of honesty and quality.

　　Here's how to remember the difference:

principal: a for adjective, and the first or foremost letter
principle: e for ethics or elementary rule