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CBSE Questions for Class 11 Commerce Accountancy Trial Balance And Rectification Of Errors Quiz 15 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Trial Balance And Rectification Of Errors
Quiz 15
R
s
.4500
spent on repair of office equipment debited to office equipment a/c. This will affect profit and loss a/c as __________.
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0%
Overstate profit by $$Rs 4500$$
0%
Understate profit by $$Rs.4500$$
0%
No affect at all
0%
Debtors a/c will be overcast by $$Rs.4500$$
Explanation
Repairs & Maintenance is a revenue expenditure. This has to be debited to expenses account in profit & loss account. This is an error of principle as revenue expenditure is recorded as capital expenditure and hence less expenses are booked against the income. Such expenses not being charged to the profit & loss account will
overstated.
While checking the accounts of ABC the following discrepancies were noticed, even though the trial balance was made to balance by putting the difference to suspense A/c.
(a) Sales day book for the month of June 2013 was found overcast by Rs. 7000
(b) A credit purchase of Rs.3,000 was omitted to be recorded in the day book.
(c) Rs.4,300 received from A credited to A's Rs.3,400
(d) Purchase of office equipment worth Rs.5,000 included in trading purchases.
From the above details while rectifying the mistake suspense a/c will be.
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0%
Debited by Rs.9,100
0%
Credited by Rs.6,100
0%
Debited by Rs.7,900
0%
Credited by Rs.7,900
Explanation
Solution to this will be as under:
(a) Sales day book for the month of June 2013 was found overcast by Rs. 7000: Suspense A/c will be credited by Rs.7000.
(b) A credit purchase of Rs.3,000 was omitted to be recorded in the day book: Its a complete omission of an entry, hence no affect on suspense a/c.
(c) Rs.4,300 received from A credited to A's Rs.3,400: This will affect suspense account of debit of Rs.900.
(d) Purchase of office equipment worth Rs.5,000 included in trading purchases: Its an error of principle, hence no affect on suspense a/c.
In Summary:
Credit to Suspense A/c Rs.7000
Debit to Suspense A/c Rs. 900
Net credit to Suspense A/c of Rs.6100
Rectification of which types of errors requires opening of suspense A/c?
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0%
Errors of principle.
0%
Complete omission.
0%
Partial omission.
0%
Errors of commission.
Explanation
Partial omission of any transaction affect the agreement of trial balance. The difference in trial balance will be parked by opening suspense account. All such rectifications are passed through suspense a/c. Suspense account finally should not have any balance.
An old furniture was sold for $$Rs. 750$$, but the amount entered in the Sales Day book as $$Rs. 570$$. On rectification of this error suspense A/c will be __________.
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0%
credited by $$Rs. 180$$
0%
debited by $$Rs.180$$
0%
debited by $$Rs.750$$
0%
credited by $$Rs. 570$$
Explanation
Sale of old furniture of $$Rs.750$$ is recorded as $$Rs.570$$, it is an error of commission as the amounts are wrongly taken. There will be a difference in trial balance of $$Rs.180$$ i.e $$Rs.750$$ - $$Rs.570$$.
To rectify the transaction, suspense account will be debited by $$Rs.180$$.
Which of the following error cannot be disclosed by trial balance?
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0%
Error of principle.
0%
Compensating errors.
0%
Error of complete omission.
0%
All of the above.
Explanation
There are few errors which cannot be disclosed by trial balance as these are affecting both the side of trial balance. In such cases, trial balance will not have any difference and both the sides will show an equal amount.
Below errors cannot be disclosed by trial balance:
Error of principle- Revenue expenditure are debited as capital expenditure
Compensating error- One error is compensated by another error
Error of complete omission- Credit sale is completely omitted in recording.
Consider the following statements:
A credit purchase during the accountancy year which was not recorded in the books of account but included in the closing stock is to be:
Added to the purchase account
Added to the creditor's account
Subtracted from the closing stock
Added to the opening stock
Which of the statements given above is/are correct?
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0%
3 only
0%
1 and 2
0%
2 and 3
0%
2, 3 and 4
Explanation
Accounting entry for credit purchase will be as under:
Purchase A/c Dr.
To Creditors A/c
Hence, if the transaction is not recorded in the books of account, it has to be:
1. Added to purchase account
2. added to the creditors account.
Which of the following errors will not affect the trial balance?
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0%
Wrong balancing of an account
0%
Wrong totalling of an account
0%
Writing an amount in the wrong account but on the correct side
0%
Omission of an account from trial balance
Explanation
The error of Principle does not affect the trial balance.
When the transaction
amount is posted in the wrong account but on the correct side will not affect the trial balance.
If a receipt of Rs.200 from Rajesh (our debtor) has not been recorded in the books, the profit would show __________.
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0%
an increase of Rs. 2000
0%
a decrease of Rs. 200
0%
neither an increase nor a decrease
0%
none of the above
Explanation
The transaction has not been recorded at all which is an error of omission.
Also, this journal has a direct effect in the balance sheet which does not affect the profit/loss account.
In either case, there would not be increase or decrease in profit.
Purchase of office furniture of Rs. 1,200 has been debited to general expense account. It is __________.
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0%
a clerical error
0%
an error of principle
0%
an error of omission
0%
a compensating error
Explanation
An error which violates the fundamental accounting principles is an error of principle.
In the given question, capital expenditure is treated as revenue expense. It shows that the basic classification of capital and revenue expenditure is violated. Such an error is therefore an error of principle.
Rent paid to landlord amounting Rs.500 was credited to Rent A/c with Rs.5,In the rectifying entry, Rent A/c will be debited with ________.
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0%
Rs. 5,000
0%
Rs. 500
0%
Rs. 5,500
0%
Rs. 4,500
Explanation
Rectified Entry
Rent A/c dr. 5500
To Suspense A/c 5500
Therefore, C is the correct option.
If purchase return of Rs.2,000 has been wrongly posted to the debit of the sales return account, but has been correctly entered in the supplier's account, the total of ___________________________.
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0%
trial balance would show the debit side to be Rs.2,000 more than the credit
0%
trial balance would show the debit side to be Rs.2,000 more than the debit
0%
debit side of the trial balance will be Rs. 4,000 more than the credit side
0%
credit side of the trial balance will be Rs. 4,000 more than the debit side
Explanation
If a purchase return of Rs.2,000 has been wrongly posted to the debit of the sales return account it means the debit is more then 2000+2000 = 4000 from the credit side.
In this case, journal will be:
Sale return a/c Dr 2000
Purchase return a/c Dr 2000
To Suspense 4000
Hence c is thee correct answer.
Which of the following would not be revealed by preparation of a trial balance?
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0%
Payment of wages entered in the Cash Book but not- posted to Wages A/c in the ledger.
0%
Sale of an old machinery credited to Sales A/c.
0%
Rent paid Rs.750 entered as Rs.570 in the Rent A/c but correctly entered in the Cash Book.
0%
Posting a debit entry to the credit of an account.
Explanation
.
Errors of commission arises when a
ny transaction is
_____________.
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0%
recorded in a fundamentally incorrect manner
0%
incorrectly recorded; either wholly or partially
0%
omitted to be recorded
0%
none of the above
Explanation
Error of Commission is where any transaction is recorded erroneously.
For eg:
1. A transaction is recorded on the right side of the account but twice.
2. A transaction is recorded at an incorrect amount amount but at the right side of the account.
Purchased goods from Gopal for Rs.3,600 but was recorded in Gopal's A/c as Rs.6.300, in the rectifying entry, Gopal's A/c will be debited with ___________.
Report Question
0%
Rs. 9,900
0%
Rs.
2,700
0%
Rs.
2,600
0%
Rs.
6,300
Explanation
As Gopal is credited with 6300 instead of 3600. To rectify this error, Gopal account should be debited with the difference i.e., 2700 (6300-3600).
Correct Entry
Purchases a/c Dr. 3600
To Gopal a/c 3600
Incorrect Entry
To Gopal a/c (wrong posting in ledger) 6300
Rectifying Entry
Gopal a/c Dr. 2700
Errors of carry forward from one year to another year affect __________________.
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0%
personal account
0%
real account
0%
nominal account
0%
personal
account
& real
account
Explanation
Errors of carry forward from one year to another year affect personal account and real account. Hence, the correct option is D.
Clerical errors are further classified into _____________________.
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0%
Errors of omission
0%
Errors of commission
0%
Compensating errors
0%
All of the above
Explanation
Errors are classified as:
1) Error of principle
2) Error of Commission
3) Error of Omission
4) Compensating Error
The error of principle is the error where the basic fundamental accounting principle is not followed.
The other errors like the error of commission, error of omission and compensating error are those which are committed by the accountants. These are called clerical error.
Which of the following is not true of a trial balance?
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0%
It proves that the total debits equal total credits, if it balances.
0%
It facilities preparation of financial statements.
0%
It proves that no errors have been made in recording transactions, if it balances.
0%
It will not detect an error where the accounts debited and credited and reversed to recording a particular transaction.
Explanation
Agreeing of trial balance off course proves that the books of account are arithmetical correct but it does not confirm that the books are completely error free. There are other type of errors like error of principle and error of omission, which does not affect the trial balance.
Hence this can not be said that tallying of trial balance proves that books are error free.
A sale of Rs. $$50,000$$ to A was entered as a sale to B. This is an example of ___________.
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0%
error of omission
0%
error of commission
0%
compensating error
0%
error of principle
Explanation
When error has committed while posting, its called an error of commission.
Sales of $$Rs.50000$$ to A is entered as sales to B, its an error of commission. There will be no affect on trial balance due to this.
Rectification entry will be passed as under:
Mr. A Dr. $$50000$$
To Mr. B $$50000$$
Making an entry on the wrong side are ___________.
Report Question
0%
Errors of Principle
0%
Compensating Errors
0%
Errors of Omission
0%
Errors of Commission
Explanation
Error of commission is that where the amount is wrongly posted or amount is posted in a wrong account. For example an amount of Rs.200 debited to Ram's a/c against the purchases instead of crediting his a/c.
When any particular transaction has not at all been entered in the journal or in the book of original entry, it cannot be posted into the ledger at all, such errors are known as ___________.
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0%
errors of partial ommission
0%
errors of complete ommission
0%
errors of principle
0%
compensating errors
Explanation
When a particular accounting transaction is omitted to be recorded in the books of account, this is an error of omission. This kind of error are clerical error and happened due to negligence of the person responsible for accounting.
Error of omission may be due to partial omission and complete omission. In case of complete error, a transaction is completely omitted to be recorded.
Which of the following error can affect the agreement of trial balance?
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0%
Wrong totaling of subsidiary books.
0%
Error of principle.
0%
Compensating errors.
0%
All of the above.
Explanation
Error of principle and compensating error cannot be disclosed from the trial balance as these are double sided error. In both the types of error, trial balance will not have any affect.
Wrong total of subsidiary books will surely affect the trial balance as its a single side error. For example, sales day book totaled as Rs. 4500 instead of Rs.5400.
Missing to transfer the balance of an account to the trial balance or omitting to write the balance of an account in the trial balance is __________.
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0%
Errors of principle
0%
Errors of commission
0%
Errors of omission
0%
Compensating errors
Explanation
When an accounting transaction is missed out in recording or partially missed out in posting, such error are called errors of omission. Omission may be partial or complete omission.
For example, Rs.4500 balance in Ram's a/c is missed out while transferring the balance in trial balance. Its an error of omission.
If a purchase return of Rs.100 has been wrongly posted to the debit of the sales return account, but had been correctly entered in the suppliers account, the total of the trial balance would show the ____________.
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0%
Credit Side to be Rs.100 more than debit side
0%
Debit Side to be Rs.100 more than credit side
0%
Credit Side to be Rs.200 more than debit side
0%
Debit Side to be Rs.200 more than credit side
Explanation
For the purchase return of Rs.100, purchase return account should be credited. Instead of the credit to purchase return an amount of Rs.100 is debited to sales return. This will make the effect double i.e of Rs.200. In such situation, trial balance debit side will be more by Rs.200 than credit side.
Which of the following errors is an error of omission?
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0%
Sale was written in the purchases journal.
0%
Wages paid to Mohan have been debited to his account.
0%
The total of the sales journal has not been posted to the Sales Account.
0%
None of the above.
Explanation
When a transaction is left out in recording the same either partially or completely, it is an error of omission. In case of partial error, trial balance will not have an agreement.
The total of the sale journal not posted to sales account,it is an error of omission.
Rs $$2,18,400$$ paid to a supplier has been posted to the supplier's account as Rs$$2,14,800$$. Identify the amount of the trial balance difference which will be placed in a suspense account.
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0%
Dr. $$3,600$$
0%
Dr. $$2,18,400$$
0%
Cr. $$3,600$$
0%
Dr. $$7,200$$
Explanation
Wrong posting of an amount in a single side of the account will affect the trial balance. In the given situation an amount of Rs.218400 paid to a supplier is posted as Rs.214800. It is an error of commission. There is a short debit to the supplier's account of Rs.3600 (Rs.218400-Rs.214800).
The difference of Rs.3600 will be placed in suspense account.
A credit sale of Rs$$1,000$$ to Santhanam has been wrongly passed through the purchases book. Which of the following rectification entry is correct?
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0%
Suspense A/c Dr. $$2,000$$
To Sales A/c $$1,000$$
To Purchases A/c $$1,000$$
0%
Purchases A/c Dr $$2,000$$
To Santhanam A/c $$2,000$$
0%
Santhanam A/c Dr. $$2,000$$
To Sales A/c $$1,000$$
To Purchases A/c $$1,000$$
0%
Sales A/c Dr. $$1,000$$
Purchases A/c Dr. $$1,000$$
To Santhanam A/c $$2,000$$
Explanation
This error will have double affect on trial balance as instead of credit to sales account, a debit is posted in purchase account. To rectify the error, following rectification entry need to be passed in books of account:
Santhanam A/c Dr. $$2000$$
To Sales A/c $$1000$$
To Purchase A/c $$1000$$
Rs$$15,000$$ received from Karan has been credited to Ravan. Which of the following rectification entry is correct?
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0%
Ravan A/c Dr $$15,000$$
To Karan A/c $$15,000$$
0%
Karan A/c Dr $$15,000$$
To Ravan A/c $$15,000$$
0%
Ravan A/c Dr $$15,000$$
To Suspense A/c $$15,000$$
0%
Suspense A/c Dr $$15,000$$
To Karan A/c $$15,000$$
Explanation
This is an error of commission. Amount received from Karan has to be credited to his account not to the account of Ravan. Rectification entry will be as under:
Ravan A/c Dr. 15000
To Karan A/c 15000
If an amount paid for servicing vehicles has been posted in error to Motor Vehicles account. The journal entry necessary to correct this error should require which of the following?
Report Question
0%
Debit Vehicle Maintenance A/c and credit Motor Vehicles A/c
0%
Debit Cash A/c and credit Motor Vehicles A/c
0%
Debit Motor Vehicles A/c and credit Vehicle Maintenance A/c
0%
Debit Vehicle Maintenance A/c and credit Cash A/c
Explanation
Original entry to be passed:
Vehicle Maintenance A/c Dr.
To Cash A/c
Wrong Entry Passed:
Motor Vehicle A/c Dr.
To Cash A/c
Rectification entry to be passed:
Vehicle Maintenance A/c Dr.
To Motor Vehicle A/c
Purchases book was undercast by Rs$$10,000$$. If this error located after preparation of final account then which of the following rectification entry is correct?
Report Question
0%
Purchases A/c Dr. $$10,000$$
To Profit & Loss Adj. A/c $$10,000$$
0%
Profit & Loss Adj. A/c Dr. $$10,000$$
To Suspense A/c $$10,000$$
0%
Suspense A/c Dr. $$10,000$$
To Profit & Loss Adj. A/c $$10,000$$
0%
Profit & Loss Adj. A/c Dr. $$10,000$$
To Purchases A/c $$10,000$$
Explanation
Purchase book was undercast by Rs.10000. It is a single-sided error and affected the profit & loss account. Profit of the year is overstated as purchases book short by Rs.10000.
This needs to be rectified in the subsequent year as error has located after the preparation of final accounts. Below rectification will be passed:
Profit & Loss Adjustment A/c Dr. 10000
To Suspense A/c 10000
A re-payment of Rs$$15,000$$ has been posted to Janki Loan A/c, whereas Rs$$3,000$$ of this amount was paid as interest on the loan. To correct this error which journal entry would require?
Report Question
0%
Debit Interest A/c and credit Janki Loan A/c with Rs$$3,000$$
0%
Debit Interest A/c and credit Janki Loan A/c with Rs$$15,000$$
0%
Debit Cash A/c and credit Janki Loan A/c with Rs$$3,000$$
0%
Debit Janki Loan A/c and credit Interest A/c with Rs$$3,000$$
Explanation
It is an error of principle as expenses are debited to the liability account. Hence rectification entry need to be passed as under:
Interest A/c Dr. 3000
To Janki Loan A/c 3000
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