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CBSE Questions for Class 11 Commerce Accountancy Trial Balance And Rectification Of Errors Quiz 2 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Trial Balance And Rectification Of Errors
Quiz 2
Which item is shown on the debit side of a trial balance?
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Rent outstanding.
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Prepaid expenses.
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Purchases returns.
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Excess of income over expenses.
Explanation
Prepaid expenses means the expense which are already paid but the services against which are yet to receive. While passing the closing entry, expenses account will be credited by debiting the prepaid expense.
Most widely used method in preparation of trial balance is __________.
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Balances method
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Totals method
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Totals-cum-balances method
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All of the above
Explanation
Trial balance can be prepared in three ways:
1) Total cum balance method- In this method, total and balances both are captured in tabular form.
2) Total Method- In this method, total of debit and credit are incorporated in the tabular form.
3) Balance method- In this method, only balances are taken in the trial balance. This method is most widely used for preparation of trial balance.
When an account that normally has debit balance shows a credit balance, or vice-versa, it indicates ______________.
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an unusual transaction must have occurred
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an error in recording must have been made
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an error in recording may have been made
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an entry must have been omitted
Explanation
Trial Balance is prepared to check and confirm whether posting of all transactions is done in the ledger. If trial balance agrees, it proves that books of account are arithmetically correct. If the total of debit and credit is not matching, it means there are some clerical error.
If an account is having a debit balance actually has credit balance or vice-versa, it indicates that an there is an error in recording.
The trial balance ensures________.
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Arithmetical accuracy of the accounts maintained
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Recording of business transactions in a systematic manner
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The cost of a fixed asset
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All of the above
Explanation
Trial balance is a statement of all debits and credits which consists of double entry system of book keeping and helps in the disagreement indicating an error. Hence, trial balance ensures arithmetical accuracy of the accounts maintained.
'Good sent on approval basis' have been recorded as 'Credit sales'. This is an example of
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Error of principle
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Error of commission
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Error of omission
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Error of duplication
Explanation
'Good sent on approval basis' has been recorded as 'Credit sales'. This is an example of the
Error of principle.
If the accounting entries are not recorded as per the generally accepted accounting
principles then it is known as the Error of Principle.
Past adjustments can be rectified with the help of _____________.
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profit and loss adjustment account
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directly by making changes in capital accounts
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Both A and B
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None
Explanation
Few transactions of omission or errors come in light after finalisation of final accounts. Any omission or commission error also have retrospective effect. All these acts of omission and commission needs adjustment for correction of there impacts and instead of altering old accounts necessary adjustments are made either in profit and loss adjustment account or directly through capital accounts.
Name the methods in which trial balance can be prepared.
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Totals-cum-balances Method.
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Totals Method.
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Balances Method.
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All of the above.
Explanation
Trial balance can be prepared in three ways:
1) Total cum balance method- In this method, total and balances both are captured in tabular form.
2) Total Method- In this method, total of debit and credit are incorporated in the tabular form.
3) Balance method- In this method, only balances are taken in the trial balance.
Preparation of a trial balance helps in locating __________.
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Negligence
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Clerical errors
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Frauds
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All of these
Explanation
Option B is the correct answer.
Trial Balance is prepared to check and confirm whether posting of all transactions is done in the ledger. If trial balance agrees, it proves that books of account are arithmetically correct. If the total of debit and credit is not matching, it means there are some clerical error.
Hence, preparation of trial balance helps in locating the clerical error.
The main object of audit of accounts of a partnership firm is to __________.
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Meet the statutory requirements
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Increase the profits
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Increase the goodwill
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Detect errors and frauds
Explanation
As per the Income Tax Act, Tax Audit is compulsory for the partnership firm if the turnover exceeds Rs. 1 crore in financial year.
The main object of the audit of accounts of partnership is to ensure the verification of books of account to detect frauds and errors.
Totals method does not help in assuming _________of balances of various accounts.
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Total of each side in the ledger
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Application of double entry system
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Accuracy
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None of the above
Explanation
T
otals method is not
in use widely as it
does not
determines the
accurate
balances of the accounts and thus, also
does not help
in the preparation of the Financial statements or final accounts.
The amount listed for cash in the trial balance represents __________________.
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The cash at the beginning of the period.
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Cash receipts during the period.
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Cash receipts minus disbursements during the period.
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The balance of cash on the date of trial balance.
Explanation
A Trial Balance is a statement that states the closing balances of all the accounts at the end of the accounting period. Thus, similar to all the other accounts, the closing balance of cash and bank only appears in the Trial Balance.
Thus, the correct option is D.
Which of the following is not an example of clerical or technical error?
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Misappropriation of cash
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Errors of omission
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Error of commission
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None of the above
Explanation
There are four types of error which may arise during the accounting:
1) Error of Principle
2) Error of commission
3) Error of omission
4) Compensating Error
Misappropriation of cash is a fraudulent activity and its not fall in any of the error category.
In order to detect which of the following is an error, the auditor need not agreed to the agreement of the trial balance?
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Good worth Rs.450 returned to supplier and supplier's account credited
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Sales book undercast Rs. 1,000
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Postage account Rs. 160 has not been entered in trial balance
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Furniture purchased worth Rs. 12,000 has been debited to office expense account
Explanation
Option D is correct.
Purchase of furniture is a capital nature transaction. In such case furniture account should be debited instead of office expenses. This kind of error are classified as "Error of Principle".
In such kind of error, trail balance will not have any disagreement and show the equal balance. Hence auditor need not to refer the trial balance to detect such error.
A Trial balance is helpful for preparation of final account.
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True
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False
Explanation
Trial balance is a statement showing arithmetic accuracy of the ledger balances.
It is a statement showing balances of all the ledger accounts at a particular point of time.
It is a summary of all the accounts to check whether all the debit and credit balance are equal or not.
It forms the basis for the preparation of the financial statements of the entity.
State whether the following statement is True or False.
Rectification of errors will necessarily balance a Trial balance.
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True
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False
Explanation
The trial balance is prepared to check the arithmetical accuracy of the books of accounts and if there are any errors which are not compensating or omitted the trial balance won't tally. Hence, rectification of a mistake is necessary to tally the trial balance.
Therefore, the above statement is true.
The Trial balance shows only _________ accuracy.
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Arithmetical
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Accounting
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Historical
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Financial
Explanation
A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process. which shows final position of all accounts and helps in preparing the final statements.
The purpose of preparing a trial balance is to ascertain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced. As a summary of the ledger, it is a list of the accounts and their balances. When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct. However, the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts. It only ensures that all debits and the corresponding credits have been properly recorded in the ledger.
A Trial Balance is a list of __________ accounts.
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personal
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real
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nominal
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ledger
Explanation
Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy.
Trial balance is useful for locating ____________.
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errors
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debit balance
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financial balance
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credit balance
Explanation
The objective of preparing the trial balance is to check the accuracy of posting. If trial balance agrees, it proves that books are arithmetically accurate. If it does not agree, there are chances of error.
Hence, Trail balance is useful for locating errors.
Drawing account appears in ________ column of the trial balance.
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L.F
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Debit Balance
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Credit Balance
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None of the above
Explanation
Drawing is a personal withdrawal done by the proprietor. All personal drawings are debited to the drawing account.
Drawing account will always have a debit balance. Drawing account must be shown in the debit side of trial balance.
A Trial balance provides the base for preparation of __________.
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Final Accounts
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Vouchers
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Debit Notes
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Credit Notes
Explanation
Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy. If trial balance agrees, it provides the base to prepare the final accounts. Financial statements are prepared using all these ledger balances in the trading, profit & loss account and the balance sheet.
A Trial balance is a _________.
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Ledger
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Journal
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Subsidiary
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Statement
Explanation
Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy. Trial balance is a statement of all ledger balances.
Total of all debit balance must be _____________ to the total of all credit balances.
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different
0%
equal
0%
more
0%
less
Explanation
Under the double entry system of accounting, every transaction has dual aspects i.e. debit and credit. Thus, the total of debit balances must equal to the total of credit balances of the Trial balance to ensure the arithmetical accuracy of accounts.
A list of balances of all the accounts in ledger is called _________.
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Balance sheet
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Profit and Loss A/c
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Trading A/c
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Trail Balance
Explanation
Trial balance is a statement of all debits and credits in a double-entry account book. It shows the balances of all accounts on a particular date. It helps in verifying the arithmetic accuracy of the double entry system used for the accounts. Trading and profit and loss account is used to determine the profitability of the business whereas financial position is determined by the balance sheet.
A Trial balance is an Account.
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True
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False
Explanation
Trial balance is a statement showing balances of all the general ledger accounts at a particular point of time.
It is not an account.
It is a summary of all the accounts to check whether all the debit and credit balance are equal or not. It forms the basis for the preparation of the financial statements of the entity.
State whether the following statements are True or False.
A Trial balance is most important document.
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True
0%
False
Explanation
A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts.
(Accounts with zero balances will likely be omitted.) The debit balance amounts are listed in a column with the heading "Debit balances" and the credit balance amounts are listed in another column with the heading "Credit balances." The total of each of these two columns should be identical.
Neither the unadjusted trial balance nor the adjusted trial balance is a financial statement and neither trial balance is distributed to anyone outside of the accounting and auditing staff. In other words, the trial balance is an internal document.
Goodwill account appears on _____________ side of Trial Balance.
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debit
0%
credit
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both sides
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none of these
Explanation
Fixed assets are classified as tangible and intangible assets.
All the assets will always show a debit balance.
Goodwill is a type of an intangible fixed asset which is shown in the balance sheet under the fixed assets. Such an item will always show a debit balance as it is an asset for the business entity.
___________is prepared from the balance in ledger accounts.
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0%
List
0%
Journal
0%
Book
0%
Trial balance
Explanation
A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process which shows final position of all accounts and helps in preparing the final statements. The task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them up in the ledger. It is normally prepared at the end of an accounting year. However, an organisation may prepare a trial balance at the end of any chosen period, which may be monthly, quarterly, half yearly or annually depending upon its requirements.
Trial Balance is a proof of __________ accuracy.
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Grammatical
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Accounting
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Arithmetical
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Posting
Explanation
The objective of preparing the trial balance is to check the accuracy of posting. If trial balance agrees, it proves that books are arithmetically accurate.
Hence, Trial Balance is a proof of arithmetical accuracy.
A Trial balance may be prepared on any day, date.
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True
0%
False
Explanation
Trial balance is a statement showing all the
ledger balances are properly balanced.
Usually trial balance lists year ending balances in each of the ledger accounts but it can also be prepared on any other day or date in order to ensure the arithmetic accuracy on that particular day or date.
One sided errors are disclosed by _________.
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Trial Balance
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Suspense A/c
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Journal
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Ledger A/c
Explanation
One-sided errors are those errors which affects only one side of the trial balance, or may have an effect on only one account out of two.
These errors are easily classified by the trial balance, as they result in non-agreement of the trial balance.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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