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CBSE Questions for Class 11 Commerce Accountancy Trial Balance And Rectification Of Errors Quiz 1 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Trial Balance And Rectification Of Errors
Quiz 1
Which of the following statements is correct in relation to a trial balance?
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It shows the financial position of a business.
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All the balances in the trial balance will be summarized on the business balance sheet.
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It is a list of balances and forms the starting point for the preparation of the business accounts.
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None of the above.
Explanation
It is a list of balances and forms the starting point for the preparation of the business accounts.
Which of the following errors are revealed by the trial balance?
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Errors in balancing account
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Errors of principle
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Errors of complete omission
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Compensatory Errors.
Explanation
Error in balancing an account is an error of commission. In such situation, trial balance will not be tallied. Hence these kind of errors can be revealed by the trial balance.
State whether the following statement is True or False.
In trial balance purchases returns are recorded on Debit side.
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True
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False
Explanation
Purchase is an expense so, purchase return is opposite of purchase therefore, it should be recorded on credit side of the trial balance.
_______are passed for rectifying errors which might have committed in the books of account.
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Transfer Entries
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Adjustment Entries
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Rectification Entries
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Opening Entries
Explanation
.
Preparation of trial balance helps in the deduction of ___________.
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Error of Principle
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Compensating Errors
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Errors of Omission
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Clerical Errors
Explanation
While doing the financial accounting, there are chances of having errors. Financial accounting is based on dual system of accounting where for every debit there will be a credit. In case of mismatch in trial balance, there are chances of a clerical error.
Sales to Mr. Gill recorded in purchase journal would affect ___________.
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Sales Account
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Sales Account, Purchase Account and Mr. Gill's Account
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Purchases Account and Sales Account
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Journal Proper
Explanation
Sales to Mr. Gill should be recorded in sales day book. If it recorded in purchase book, it affect the purchase account whereas sales not recorded hence it affects sales account too. Mr. Gill's account is also affected as instead of debit to him, there will be wrong credit posted.
After preparing the trial balance the accountant finds that the total of a debit side is short by Rs.2,This difference will be _____________.
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debited to suspense account
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credited to suspense account
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adjusted to any of the debit balance accounts
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adjusted to any of the credit balance accounts
Explanation
As the suspense account is temporary management account, it is used to rectify the amount hence when the debit side is short by 2500 suspense account is debited by 2500 to correct errors and tally the problem.
Therefore, B is the correct option.
State whether the following statement is True or False:-
Single sided errors affect only one account.
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True
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False
Explanation
The statement is true.
One
-
sided errors
or
single
-
sided errors affect only one account
as
only one
aspect of the transaction has been omitted or wrongly recorded.
For example: a sum of Rs 2,500 given to Ajay is correctly recorded in the Cash Book
but
omitted to be posted to the debit
side
of Ajay's
Account
.
State whether the following statements are True or False:
Amount spent for the repairs of old furniture is debited to Machinery Account.
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True
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False
Explanation
If the amount is spent on repairs of old furniture then it will be treated as a revenue expense and will be debited to repairs a/c.
The Journal Entry would be
Repairs a/c Dr.
To Cash a/c
(Being amount spent for the repairs of old furniture)
A trial balance contains the balances of ______________________.
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Only personal and real accounts
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Only real and nominal accounts
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Only nominal and personal accounts
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All accounts
Explanation
Trial Balance
is a statement which lists all the
balances
of the
Real
,
Personal
and
Nominal
Account irrespective of Capital or Revenue account. It
contains
two columns debit and credit.
State whether the following statements are True or False:
Errors affecting the agreement of trial balance are called one side errors.
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True
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False
Explanation
Error due to which trial balance does not balance is known as one sided errors.
Returns outwards book was under cast by Rs.If this error located after preparation of final account then which of the following rectification entry is correct?
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Suspense A/c Dr. 150
To Profit & Loss Adj. A/c 150
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Profit & Lots Adj. A/c Dr. 150
To Suspense A/c 150
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Returns Outwards A/c Dr. 150
To Profit & Loss Adj. A/c 150
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Profit & Loss Adj. A/c Dr. 150
To Returns outwards A/c 150
Explanation
Undercasting of balance of return outward book leads to lower profits. So the journal entry will be:
Suspense A/c Dr. XXX
To P&L Adj. A/c XXX
Therefore, A is the correct option.
Rs. 15,000 received from Karan has been credited to Ravan. Which of the following rectification entry is correct?
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Raven A/c Dr. 15,000
To Karen A/c 15,000
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Karan A/c Dr. 15,000
To Raven A/c 15,000
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Ravan A/c Dr. 15,000
To Suspense A/c 15,000
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Suspense A/c Dr. 15,000
To Karan A/c 15,000
The preparation of a trial balance helps in
locating
______________.
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Errors in Principle
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Errors of Omission
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Clerical Errors
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Compensatory Errors
Explanation
While recording the transaction, there is a possibility of having the error. Since accounting is based on double entry system, for every debit there will be a credit. Hence at any point of time, trial balance must be tallied. If trial balance dose not matches, there must be some clerical error.
Which of the following error is an error of principle?
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Rs. 1000 received from Ganesh has been debited to his account
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Purchase of Rs. 3000 has been entered in the sales journal
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Repairs to machinery have been debited to machinery account
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Repairs to scooter have been debited to repairs account
Explanation
Option C is correct.
Accounting entries are recorded as per the generally accepted principles. If any of these principles are violated or ignored, error resulting from such violation are known as errors of principle.
An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue.
Repairs to machinery is debited to machinery account instead of debiting to repairs and maintenance account i.e. it is treated as capital expenditure instead of revenue expenditure hence it is error of principle.
Which one of the following error is an error of principle?
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Debiting repairs account instead of furniture account.
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Sale of $$Rs.200$$ entered in the books as $$Rs.200$$.
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Cash sale of $$Rs.500$$ wrongly entered in sales book.
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Purchase transaction entered in purchases return book.
Explanation
Accounting entries are recorded as per the generally accepted accounting principles. An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue. This is very important because it will have an impact on financial statement. Debiting repairs account instead of furniture account is an example of error of principle (capital expenditure is wrongly recorded as revenue expenditure).
Errors which affect only one account is _____.
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Errors of omission
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Errors of principle
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Errors of posting
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Errors of commission
Explanation
Option C is the correct answer.
An error in which amount is posted to the wrong side of the same account is known as error of posting.
The error which affect only one account can be rectified by giving an explanatory note in the account affected.
The errors which affect only one account are: Error of casting, error of carrying forward, error of balancing, error of posting.
Which of the following error is an error of omission?
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Sale of Rs.800 was written in the purchase journal.
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Wages paid to Sohan have been debited to his account.
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Total of sales journal not posted to the sales account.
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Total of purchases journal posted to the sales account.
Explanation
Option C is correct.
The errors of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger.
When a transaction is completely omitted from recording in the books of original record, it is an error of omission.
The total of sales journal not posted to the sales account is error of omission as the transaction is not recorded in sales account.
Errors of carry forward from one year to another year affects ____________.
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Personal account
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Real account
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Nominal account
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Both personal and real account
Which account is generally used for rectification of errors?
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Memorandum account
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Suspense account
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Rectification account
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Adjustment account
Explanation
Option B is correct answer.
Even if trial balance does not tally due to the existence of one sided errors, accountant has to carry forward his accounting process to prepare financial statements.
The accountant tallies his trial balance by putting the difference on shorter side as "suspense account". This is an account which is usually used to rectify one sided errors in the trial balance.
Error of commission do not allow ___________.
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Correct totalling of the balance sheet
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Correct totalling of the trial balance
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The trial balance to agree
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Correct totalling of the day book
Explanation
Error of commission are the errors which are committed due to wrong posting of transaction, wrong totalling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of amount in the books of original entry. Such errors are of clerical nature and most of these affect totalling of the trial balance.
A statement containing the various ledger balances on particular date:
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Compound journal
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Ledger
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Trial balance
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None of these
Explanation
The fundamental principle of the double entry system is that for every debit there will be a credit.The statement in which the debit and credit balances are noted down and finally totaled up to ascertain if they are equal, is called trial balance.
In other words, trial balance is a statement of the debit and credit balances of the various ledger accounts which is prepared to check their arithmetical accuracy.
Which of the following account balance will be shown on debit side of Trial Balance?
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Outstanding expenses
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Cash a/c
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Short-term loan
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Creditors
Explanation
Cash account is a real account. Rule for real account is debit what come in and credit what goes out.
Hence cash account is always have the debit balance and this will be shown as debit in trial balance.
Which of the following errors are revealed by trial balance?
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Omission of an amount from the trial balance
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Posting of the wrong amount
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Wrong totalling of the book of original entry
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None of the above
Explanation
If book of original entry i.e sales day book (example) is having a wrong total, this will result a disagreement of trial balance.
Which of the following error is revealed by trial balance?
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Wrong amount entered in the book of original entry
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Wrong amount entered in a ledger account
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Complete omission of an entry from the book of original entry
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All of the above
Explanation
Option B is the correct answer.
An amount wrongly posted in ledger will make trial balance disagree. Accounting is based on double entry system of accounting where for every debit there will be a credit. Due to wrong amount of posting, debit and credit will not match and there will be a difference in trial balance.
State which of the following errors will not be revealed by the trial balance?
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Errors of complete omission.
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Errors of carrying forward.
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Wrong totalling of the purchases book.
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Error of partial omission.
Explanation
Error of complete omission would not be revealed from trial balance as its a complete omission. When complete entry is missed, this will be a complete omission, hence trial balance will not have any mismatch.
Which of the following errors is disclosed by trial balance?
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Error of principle
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Wrong amount posted in ledger account
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Non-recording of a transaction in the book of original entry
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None of the above
Explanation
Option B is correct answer.
There are various kinds of error which may occur during the accounting. These are classified as:
Error of omission
- When a complete transaction is omitted in recording. This will not affect trial balance.
Error of commission
-When a wrong amount is posted in ledger. Such kind of error affect the trial balance.
Error of principle-
If any of the accounting principle is not followed while recording the transaction. Like purchase of asset is recorded in purchase account. Trial balance will not have any disagreement due to such kind of error.
Compensating error-
If one error is compensated by another error. This will also not affect the trial balance.
A wrong amount posted in ledger will affect the trial balance. In such situation trial balance will not match.
Agreement of the trial balance may not indicate that _________________.
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No error remains undetected
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Double entry has been completed
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Arithmetic accuracy is reasonably proved
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All ledger accounts have been correctly posted
Explanation
D is correct.
Though agreement of trial balance gives an outcome that there is no clerical error but it does not ensure that all ledger are correctly posted.
For example, purchase of type writer recorded in purchase book instead of assets. In such situation, trial balance will be tallied but there is an error of principle.
An item of $$Rs.72$$ has been debited to a personal account as $$Rs.27$$, is an error of ___________.
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Commission
0%
Omission
0%
Principle
0%
None of the Above
Explanation
Error of commission is that error in which amounts are incorrectly recorded. This may lead to a disagreement in the trial balance.
Which of the following errors will cause the trial balance to be out of balance?
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The total of the Purchase book is Rs. 1000 short.
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Goods received back from Mahesh, Rs. 250 have not been entered in the Returns Inwards book.
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Office furniture purchased from Ravi and Co. Rs. 950 has been entered in the Purchase book.
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A purchase of Rs. 251 from Gopal and Co. has not been entered in the Purchase book.
Explanation
All credit purchases are recorded in purchase day book. At the end of a particular period, total of purchase day book will be transferred to purchase account in ledger. All suppliers accounts are also posted in to individual ledger.
Under casting of purchase book by Rs.1000 will affect the purchase account and will not match the balance of the corresponding suppliers account. Such mismatch will therefore, cause trial balance to be out of balance.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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