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CBSE Questions for Class 11 Commerce Accountancy Trial Balance And Rectification Of Errors Quiz 12 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Trial Balance And Rectification Of Errors
Quiz 12
A sale of office furniture credited to Sales Account :
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Is an error of omission
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Will affect the trial balance
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Will not affect the profit
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None of these
Explanation
When furniture is sold it is credited to the furniture account as it not the main purpose of the business so it cannot be categorised as normal sales. Sale of furniture is a capital income. When sale of furniture is credited to sales account, this is known as error of principle. Error of principle is when basic principle of accounting is not followed, here no distinction is made between capital and revenue items.
This error will not affect the trial balance because though the transaction is recorded in the wrong account, but the accounting treatment is correct i.e., instead of furniture account sales account is credited. The net effect of this error is not observed.
This will affect the profit because capital income and capital expense are not included in the profit and loss account. Thus when such income is treated as revenue incomes and added to the profit and loss account, the profit will be affected.
Which of the following errors will not affect the Trial Balance?
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Wrong carry-forward of an account
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Wrong totaling of an account
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Wrong balancing of an account
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Omission of an account from Trial Balance
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posting a correct amount in the wrong account on correct side.
Explanation
Posting the correct amount in the wrong account on the correct side is the error of posting. This error does not affect the agreement of the trial balance because even though the posting is made to the wrong account but the amount entered is correct and the accounting treatment is same as it would be in the correct account.
For example, cash sales of 10000, is debited to the debtor's account with 10000 instead of a cash account. The credit entry for sales account remains the same. In this case the debtors account balance will increase while the cash account balance will be unchanged. The trial balance thus tallies.
Credit purchase of goods worth Rs 10000 was recorded as credit sale to Mr. X , the mistake was discovered after 2 months. Rectifying entry is to be made in ?
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Journal Proper( General Journal)
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Sales Book.
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Cash Book.
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Purchases Book.
Explanation
The rectifying entry will be made in Journal proper to rectify the error of posting in wrong account.
A purchase of Rs.10,000 has been wrongly posted to the credit of sales Accountant had been correctly entered in the Supplier Account. This error _____________.
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is an Error of Principle
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will not affect the Trial Balance
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Will not affect the Gross Profit
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None of these
The main object of opening suspense account is ___________.
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To tally the trial balace
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To avoid the delay in the preparation of financial statements
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To rectify the errors
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None of these
Explanation
Suspense accounts are the accounts that are prepared when the trial balance does not tally or when there is an unidentified transaction. These are prepared temporarily to avoid delay in preparation of financial statements and are closed when the reasons are deducted or at the end of accounting cycle.
Which of the following errors will affect the Trial Balance?
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Errors of complete omission.
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Errors of recording in the books of original entry.
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Errors of posting involving the posting to the wrong account on the correct side with the correct amount.
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Errors of principle
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Compensating errors
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Correct recording in the cash book but not posted in the ledger at all.
Explanation
When a transaction has been correctly recorded in the cash book but not posted in the ledger at all, the trial balance will not tally.
For example, for cash received from debtors, the entry is passed in the cash book but omitted to be posted to the ledger of debtor's account. In this case the debtors balance should decrease, but since the posting is not made to the ledger, there will be no effect on the debtor's account balance, whereas the debit balance of cash account will increase. These balances are transferred to the trial balance, in which the debit balance will be more than the credit balance.
Rent paid to landlord, and Ram's account has been debited.
This error ____________ .
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0%
is an error of commission
0%
will affect the trial balance
0%
will not affect the profit
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None of these
Explanation
When ram has been debited for rent paid to landlord, this is an error of posting to the wrong account.
This is when posting is made to a wrong account but on the correct side. This error will not affect the agreement of the trial balance.
This is because even though the entry is passed to the wrong account, but the accounting treatment is correct i.e., the correct entry for this transaction should be -
Rent A/c Dr
To cash A/c
Instead of this the incorrect entry passed was
Ram A/c Dr
To Cash A/c
Here instead of rent account , ram's account is debited. This does not affects the agreement of the trial balance.
Rent being revenue expenditure is deducted from the current year profit, ram's account being personal account is not included in the profit and loss account. This affects the actual profit of the year.
Good returned by Y for Rs.10,000 passed through the purchases Book. The error will result in _________________.
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0%
Increases in gross profit
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Decrease in gross profit
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No effect on gross profit
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Either (a) or (b)
Goods sold to Y for Rs.10,000 passed through the Purchase Book. The error will result in _______________.
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0%
Increase in gross profit
0%
Decrease in gross profit
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No effect on gross profit
0%
Either (a) or (b)
Good returned to X for Rs.10,000 passed through the purchase Book. The error will result in ______________.
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Increase in gross profit
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Decrease in gross profit
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No effect on gross profit
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Either (a) or (b)
Explanation
Good returned to X for Rs.10,000 means it is purchase return.
Purchase return will be deducted from purchase it means debit of trading will be reduce.
If debit is less and credit more in trading then gross profit will increase.
Hence a is the correct answer.
Goods Purchased from Y for Rs. 4000, now returned, are passed through Purchase book. This is an error of ______.
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0%
omission
0%
commision
0%
principle
0%
compensating
Explanation
In the given question entry should have been recorded in purchase return book but is recorded in purchase book. This is an error of principle. An error of principle occurs when an entry has been passed in the wrong account. These errors violate the basic fundamentals of accounting.
Sales to Meena Rs. 143 was debited as 413 _________________.
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is an error of omission
0%
will not affect the trial balance
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will not affect the profit
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None of these
A purchase of Rs. 10,000 has been wrongly posted to the credit of sales Account but had been correctly entered in the Supplier's Account. This is an error of ______.
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0%
Omission
0%
Commission
0%
Principle
0%
Compensating
Explanation
Error of commission means wrong posting of the balance or wrong total. These kind of errors may affect the balancing of the Trial Balance.
Therefore, this example is related with error of Commission.
Amount of Rs. 15000 taken for personal use from business account recorded as business expenses. This is an error of ______.
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0%
omission
0%
commission
0%
principle
0%
compensating
Explanation
The amount of 15,000 taken for personal use for business account should have been debited to drawings account, but is debited as business expenses.
This is an error of principle. An error of principle occurs when an entry has been passed in the wrong account. These errors violate the basic fundamentals of accounting.
A purchase of Rs. 10,000 has been wrongly posted to the debit of Supplier's Account but had been correctly entered in the Purchases Account. This is an error of ____________.
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0%
Omission
0%
Commission
0%
Principle
0%
Compensating
Explanation
A purchase of Rs-10,000 is wrongly posted to credit of purchase account but is correctly entered in the suppliers account where as the correct entry should have been :-
Purchase account...... Dr
To supplier's account.
This is an error of commission. This error includes recording in wrong account, recording wrong amount etc.
Goods costing Rs. 15000 given as charity were not recorded. This is an error of ______.
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Omission
0%
Commission
0%
Principal
0%
Compensating
Explanation
Error of omission is when a transaction is completely omitted to be recorded in the books or recorded in the journal but omitted to posted to the ledger accounts. Here the debit and credit aspect of the transaction is not present in the books of accounts. Such errors do not affect the agreement of the trial balance.
When goods given as charity is not recorded, there will be no effect on the purchases account as well as the charity account.
A purchase of Rs. 10,000 has been wrongly posted to the credit of Purchase Account but had been correctly entered in the Supplier's Account. This is an error of ______.
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0%
Omission
0%
Commission
0%
Principle
0%
Compensating
Explanation
A purchase of Rs-10,000 is wrongly posted to credit of purchase account but is correctly entered in the suppliers account where as the correct entry should have been :-
Purchase account...... Dr
To supplier's account.
This is an error of commission. This error includes recording in wrong account, recording wrong amount etc.
Goods costing Rs. 25000 destroyed by fire were not recorded. This is an ______.
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0%
Omission
0%
Commission
0%
Principal
0%
Compensating
Explanation
Error of omission is when a transaction is completely omitted to be recorded or recorded in journal but omitted to be posted in ledger accounts. Such errors don not affect the agreement of the trial balance. this is because trial balance is prepared from the ledger account balances and if the transaction is not posted into the ledger accounts, they would not affect the accounts.
Goods costing Rs. 55000 distributed as free samples were not recorded. This is an error of _____.
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0%
Omission
0%
Commission
0%
Principal
0%
Compensating
Explanation
Error of omission is when a transaction is not recorded at all in the journal or in any subsidiary books, both debit and credit aspect of the transaction is missing, which does not affect the trial balance.
When goods are distributed as free samples advertisement account and purchases account is affected. There will not be any effect on the trial balance because of this error.
Goods costing Rs. 35000 destroyed by fire were no recorded. This _________________.
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will affect the agreement of trial balance
0%
will not affect the agreement of trial balance
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may or may not affect
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None of these
Explanation
When an entry is not recorded in the books account, it is known as an error of omission.
When the recording of an entry is omitted, the debit and credit both are not recorded, and hence, the trial balance tallies.
Which type of error occurs when credit sale is wrongly posted to purchases book?
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Error of commission
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Error of omission
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Compensatory error
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Error of principle
Explanation
When a transaction is posted wrongly then it is known as error of commission.
Rs 25,000 received from Aditi, is credited in the account of Prerna. It is an error of:
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0%
Principle
0%
Commission
0%
Omission
0%
Compensatory
Explanation
Compensating errors are those where a wrong account is debited instead of the right account. Example When Ram Account is debited instead of Shyam then it is called Compensating error.
Error relating to fundamental aspect of accounting is known as.
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Error of principle
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Error of omission
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Error of commission
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Compensating error
Explanation
Error of principle are related to fundamental aspect of the accounting. Here, revenue account may be debited instead of capital account.
If no entry is made for goods returned by Anjani worth Rs.4,000, the rectifying entry will be to Dr _________A/c 4,000 and credit _______ A/c 4,000.
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0%
Anjani; Sales
0%
Sales Return; Anjani
0%
Suspense: Anjani
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Anjani; Sales Return
Explanation
Goods are being returned so sales return will be debited and Anjali is a debtor which will be reduced therefore it will be credited.
When the total of trial balance is not reconciled, the account opened at this juncture is:
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Trading account
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Suspense account
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Profit & loss account
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None of these
Explanation
The Trial Balance Shows the list of ledger accounts. When the debit Column of the Trial balance is equal to Credit Column then it proves the arithmetic accuracy of the Ledger accounts.
But the debit column is not equal to Credit Column then the Suspense account is opened.
An item of Rs 84 has been wrongly entered as RsThis is an error of
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0%
Omission
0%
Commission
0%
Principle
0%
No consequence
Explanation
In this case, An item of Rs. 84 has been wrongly entered as Rs. 48.
When a transaction is posted wrongly then it is known as
error of commission
.
There are mainly 2 types of error
1. Error of Principle
2. Clarical Error
Which of the statements are true.
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Trial Balance is prepared after preparing the P& L A/c
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Trial Balance is prepared after preparing the Balance Sheet
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Trial Balance is prepared before preparing the Balance Sheet
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None of these
Explanation
A trial balance is prepared to record all the balances of debit and credit of the ledger. A balance sheet is prepared at the end of the year, but a trial balance can be prepared at the end of a month, quarter, etc.
Error of Commission will not permit
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Correct Total of the Balance Sheet
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Correct Total of the Trial Balance
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The Trial Balance to agree
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None of the above
Explanation
The error of commission means the wrong posting of the balance or wrong total or entering the wrong amount in the correct subsidiary book or posting the correct amount in the wrong subsidiary book etc.
These kinds of errors may affect the balancing of the Trial Balance.
Closing stock of previous year is overvalued by Rs. $$50,000$$. Due to this.
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Previous year's profit is overstated and current year's profit is understated
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Previous year's profit is understated and current year's profit is overstated
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Previous years profit is overstated and current year's profit is overstated
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Previous year's profits is understated and current year's profit is understated
Explanation
Closing stock of the previous year is credited to the trading account of previous year which increases the credit total and the gross profit of the year. Closing stock of previous year is the opening stock of current year. Opening stock of current year is debited to the trading account of current year, if the opening stock is overvalued the current year profit will decrease.
For example, the actual value of closing stock of previous year is Rs. 20000 overvalued at Rs 70000, the value of credit side total will increase and the gross profit will increase. For the current year previous year closing stock is the opening stock and is debited in the trading account. The debit side total is deducted from the credit side total to calculate the gross profit, if the debit side total is more the gross profit will fall.
Trial balance is prepared from ____________.
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Journal
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Ledger
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Cash book
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None of these
Explanation
Trial balance is prepared from ledger balances.
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