MCQExams
0:0:1
CBSE
JEE
NTSE
NEET
Practice
Homework
×
CBSE Questions for Class 11 Commerce Accountancy Trial Balance And Rectification Of Errors Quiz 4 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Trial Balance And Rectification Of Errors
Quiz 4
State whether the following statement is True or False.
Balances of ledger accounts are posted to trial balance.
Report Question
0%
True
0%
False
Explanation
Preparing a
trial balance
from
ledger balances
is the next step of
posting
and
balancing ledger accounts
. The
trial balance
is a statement of debit and credit
balances
that are extracted from
ledger accounts
on a specific date.
Trial balance is prepared to _________.
Report Question
0%
comply with legal requirements
0%
comply with accounting standards
0%
check arithmetic correctness of books of A/c
0%
to ensure true and fair view of books of A/c
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 the final position of all accounts and helps in preparing the final statements. The task of preparing the statement is simplified because the accountant can take the account balances from the trial balance instead of looking them up into the ledger.
Which of the following is an error of principle?
Report Question
0%
Purchase of Plant & Machinery shown as trading purchase.
0%
Rs. 10,000 received from Shyam credited to Mohan A/c.
0%
Rs. 5,000 recovered from the debtors written off, credited to the Debtors A/c.
0%
Sales return amounting to Rs. 2,000 debited to be shown in purchase day book.
Explanation
While doing the accounting, if the basic rule of accounting is not followed, there is an error of principle.
For example, the purchase of machinery is debited to purchases account. Its an error of principle as capital expenditure is debited as revenue expenditure. This will affect the profitability of the business.
Rs. 510 paid on carriage of office equipment was debited to sundry expenses a/c. On rectification account will be credited_________.
Report Question
0%
suspense
0%
sundry expenses
0%
sales
0%
none of these
Explanation
As sundry expenses account is wrongly debited therefore, to rectify it shall be credited.
Which of these is an indicator of non-arithmetic discrepancies in books of account?
Report Question
0%
Agreement of trial Balance.
0%
Disagreement of trial balance.
0%
Non-balancing of cash book.
0%
Non-balancing of personal account.
Explanation
Option A is correct.
Trial balance is prepared by taking the individual ledger balances. If the trial balance agrees, it proves that the books of arithmetical correct. If trial balance is not tallied i.e. debit and credit does not agrees, that means the books of account are not arithmetically correct.
Agreement of trial balance is an indicator that books of account are arithmetically correct but there are chances of non arithmetic discrepancies in books of account.
_________ errors affect agreement of trial balance.
Report Question
0%
Omission in casting
0%
Errors of balancing
0%
Errors in totalling the trial balance
0%
All the three
Explanation
Option D is the correct answer.
Below errors affect the agreement of trial balance:
Omission in casting:
Example- Sales daybook is totalled as Rs.4500 while posting in sales ledger instead of Rs.5400.
The error of balancing:
Example-Creditors a/c is wrongly balanced as Rs.3600 instead of Rs.36000.
Errors in totalling the trial balance:
Example- Trial balance is wrongly totalled as Rs.56450 instead of Rs.65450.
If an amount is posted in the wrong account/wrong side/wrong amount/wrong total the resultant error is called error of _______.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensating
Explanation
Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. For example, Raj Hans Traders paid Rs. 25,000 to Preetpal Traders (a supplier of goods). This transaction was correctly recorded in the cashbook. But while posting in the ledger, Preetpal's account was debited with Rs. 2,500 only. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
Transactions recorded in contravention of accounting principles results into errors of ________________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
None
Explanation
Accounting entries are recorded as per the generally accepted accounting principles. If any of these principles are violated or ignored, errors resulting from such violations are known as errors of principle. 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 statements. It may lead to under/overstating of income or assets or liabilities, etc. For example, the amount spent on additions to the buildings should be treated as capital expenditure and must be debited to the asset account. Instead, if this amount is debited to the maintenance and repairs account, it has been treated as a revenue expense. This is an error of principle. Transactions recorded in contravention of accounting principles result in error of principles.
Rs.5,100 paid to Sonu as salary for the month of December 2008 was debited to his A/c. This is an error of ________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensating
Explanation
Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. Rs. 5,100 paid to Sonu as salary for the month of December 2008 wad debited to his A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
Which of the following types of errors do not affect the agreement of trial balance?
Report Question
0%
Omission of an entry altogether from subsidiary books.
0%
Errors of principle.
0%
Posting an amount on correct side but wrong account.
0%
All the three.
Explanation
One-sided error
always
affects
the agreement of trial balance.
Whereas errors which are either
two-sided error
or
principle error
will
not affect
the
trial balance
. In the below cases, the trial balance will always be tallied and does not have any difference:
Omission of an entry altogether from subsidiary books.
For example-
sales of Rs.300 to Mr Shyam is omitted to be recorded in books.
The error of principle
For example
- the purchase of machinery of Rs.5000 is debited to the purchase account.
Posting of an amount on the correct side but the wrong amount
For example-
an amount of Rs.600 credited in Shyam's account instead of Ram's a/c.
Which of these is an indicator of arithmetic discrepancies in books of account?
Report Question
0%
Agreement of trial balance.
0%
Disagreement of trial balance.
0%
Non-balancing of cash book.
0%
Non-balancing of personal account.
Explanation
Trial balance is prepared by taking the individual ledger balances. If the trial balance agrees, it proves that the books are arithmetically correct. If trial balance is not tallied i.e. debit and credit balances do not agree, that means the books of account are not arithmetically correct.
Disagreement of trial balance is an indicator of arithmetic discrepancies in books of account.
Rs. 5,100 received from Mohan but credited to Sohan A/c.This is an error of ________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensating
Explanation
Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiarity books, or wrong recording of the amount in the books of original entry. For example, Rs. 5,100 received from Mohan but credited to Sohan's A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
A return of goods worth Rs. 5,600 was not recorded. This is an example of error of __________.
Report Question
0%
Omission
0%
Principle
0%
Judgement
0%
Commission
Explanation
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. They are of two types:
(i) error of complete omission
(ii) error of partial omission
When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. A return of goods worth Rs. 5,600 was not recorded, which is an example of error of complete omission.
Balance of suspense A/c is transferred to____________.
Report Question
0%
Profit and loss A/c
0%
Balance sheet
0%
Trading A/c
0%
No entry
Explanation
A suspense account is an account in the general ledger in which amounts are temporarily recorded. A suspense account is used when the proper account cannot be determined at the time the transaction is recorded. The balance of suspense account is transferred to Balance sheet.
Therefore, B is the correct option.
When a transaction has been omitted to be recorded in the books of account completely or partially, the mistake or error is called error of __________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
None
Explanation
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. There can be two types:
(i) error of complete omission
(ii) error of partial omission
When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. When the recording of transaction is partly omitted from the books, it is an error of partial omission.
Rs. 4,000 received from Shyam credited to Shyam Associates A/c is an example of error of _________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensatory
Explanation
Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, the wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. For example Rs. 4,000 received from Shyam credited to Shyam Associates A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission effect in the trial balance.
Rectification of errors detected in the next financial year is done through ___________.
Report Question
0%
Suspense A/c
0%
Profit and loss A/c
0%
Profit and loss adjustment A/c
0%
Profit and loss appropriation A/c
Explanation
Ideally, all errors need to be rectified in the same financial year to show the true and fair view of the books of account maintained by the organization.
If errors are not rectified in the same financial year, the same errors can be rectified in the next financial year. All such errors in the next financial year will be done through Profit & loss adjustment account.
Credit sales of Rs.5750 to M/s Ram was wrongly debited to Mr. Ram's Account. On rectification of the error the profit and loss_______.
Report Question
0%
will remain same
0%
decrease by Rs. 5750
0%
increase by Rs.5750
0%
increase to the extent of gross profit margin
Explanation
Credit sales has to be debited to Mr. Ram's Account. There will be no affect of such entry on profit & loss account as sales is recorded correctly.
Rs.75,000 received from Mrs Sharma however this transaction was not recorded in cash journal. This is an error of_________.
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensating
Explanation
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. They are of two types:
(i) error of complete omission
(ii) error of partial omission
When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. For example, Rs. 75,000 received from Mrs. Sharma is not recorded in cash journal, is an error of complete omission.
$$Rs.4,500$$ received from M/s Ram was credited to Mr. Ram a/c. How will this affect the profit or loss?
Report Question
0%
Increase in profit by $$Rs.4,500$$.
0%
Decreases in profit by $$Rs.4,500$$.
0%
No affect at all.
0%
Debtors a/c will be overcast by $$Rs.4,500$$.
Explanation
$$Rs.4500$$ received from M/s Ram is credited to Mr. Ram. Is an error of commission. There will not be any effect on profit & loss account as it is affecting the account of person.
Rectification entry will be passed as under:
Mr. Ram A/c $$Dr. 4500$$
To M/s Ram $$4500$$
The error of posting affects__________.
Report Question
0%
One A/c
0%
Two A/c
0%
Subsidiary books only
0%
Any of the above three
Explanation
The errors which affect only one account can be rectified by giving an explanatory note in the account affected or by recording a journal entry with the help of the Suspense account. Examples of such errors are error of casting; error of carrying forward; error of balancing; error of posting to correct account but with wrong amount; error of posting to the correct account but on the wrong side; posting to the wrong side with the wrong amount and omitting to show an account in the trial balance.
Rs.4500 received from M/s Ram was credited to Mr Ram a/c. On rectification profit and loss a/c _______.
Report Question
0%
increase in profit by Rs. 4500
0%
decrease in profit by Rs. 4500
0%
no affect at all
0%
debtors a/c will be overcast by Rs.4500
Explanation
Rectification entry will be:
Mr. Ram A/c 4,500
To M/s Ram A/c 4,500
The above entry does not affect the Profit and Loss A/c, hence the correct option is C.
Non-recording of a transaction in books of account is an error of _______
Report Question
0%
Principle
0%
Omission
0%
Commission
0%
Compensatory Nature
Explanation
There are mainly 2 types of errors
1. Error of Principle
2. Clerical Errors:
It is sub divided into 3 kinds
- Error of Omission
- Error of Commission
- Compensating Error
When a transaction is not recorded in the books of accounts then it known as Error of omission
Credit sales of Rs.5500 not recorded in the Sales day book, to the extent______.
Report Question
0%
profit is understated
0%
profit is overstated
0%
loss understated
0%
not affected
Explanation
Sales are shown on the credit side of trading account. Sales contributes in the volume of profits. If the sales are recorded at the higher value, profit will be overstated and vice-versa.
Therefore, A is the correct option.
A credit sales of Rs. $$4000$$ to $$Y$$ was credited to $$Y$$'s A/c. Rectification entry would be passed if the error is detected after preparation of trial balance but before preparation of Trading and profit and loss A/c
Report Question
0%
Debtor's A/c Dr $$8000$$., Sales A/c Cr Rs. $$8000$$
0%
Debtor's A/c Dr Rs.$$8000$$., Sales A/c Cr Rs. $$4000$$, Suspense A/c Rs. $$4000$$
0%
No entry, Debit Debtors A/c By Rs. $$8000$$
0%
Debtors A/c Dr Rs. $$4000$$, Sales A/c Cr Rs. $$4000$$
Rs.5500 incurred on sundry expense inadvertently recorded in the books of account as Rs.This is an example of ..........
Report Question
0%
fraud
0%
error of commission
0%
error of principle
0%
compensatory error
Explanation
Error of commission means when there is error in totaling or posting of the transaction.
Trial balance is prepared to __________.
Report Question
0%
Check true and fair view of balance Sheet.
0%
To check arithmetic accuracy of Accounts.
0%
To ensure legal compliance
0%
To ensure compliance to IFRS
Explanation
The trial Balance is prepared to
1. To ascertain the arithmetical accuracy of the ledger accounts.
2. To help in locating errors.
3. To help in the preparation of the financial statements. (Profit & Loss account
and Balance Sheet).
Based on the facts given in question No .59 what rectification entry would be passed if the error is detected before finalization of Accounts but after preparation of Trial balance
Report Question
0%
Sales Dr Rs.45,000,Debtors Cr Rs.45,000
0%
Stock debit Rs.30,000 Trading A/c Cr Rs. 30,000
0%
Sales Dr Rs.45,000,Stock debit Rs.30,000, Trading A/c Cr Rs.75,000
0%
Sales Dr Rs.45,000 , Stock debit Rs.30,000 Debtors Cr Rs.45,000, Trading A/c Cr Rs.30,000
If there is a difference in the Trial Balance and finalization of F/A cannot be further delayed, the difference would be put to ____________.
Report Question
0%
Suspense A/c
0%
Drawing A/c
0%
Miscellaneous expense A/c
0%
Miscellaneous income A/c
Explanation
The final accounts are drawn from the Trial Balance. A trial balance is a statement that consists of the balances of all the ledger accounts. It has the balances of Assets, Liabilities, Debtors, Creditors, Expenses, and Income accounts. Usually, a trial balance is tallied before the preparation of the Final accounts. But, in the case where the preparation of the final accounts cannot be delayed, the difference is put in the Suspense account. If the Assets side is more than the Suspense Account will have a credit balance and will be shown on the liabilities side of the Balance Sheet. If the liabilities side is more then it will show a debit balance and will be shown on the Assets side of the Balance Sheet,
The correct answer is A,
Credit sales of Rs.5500 not recorded in the Sales day book. On rectification in subsequent year________.
Report Question
0%
Profit and loss a/c will be credited by Rs.5500
0%
Profit and loss adjustment a/c be credited by Rs. 5500
0%
Sales a/c will be increased by Rs.5500
0%
No effect
Explanation
Credit sales of Rs.5500 not recorded in sales day book resulted a short credit to sales account, hence the profit of the year has decreased by the same amount. Its a complete omission of an accounting entry.
If the same transaction is rectified in the subsequent year, this will be done through profit & loss adjustment account by crediting the amount of Rs.5500.
0:0:1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
0
Answered
0
Not Answered
0
Not Visited
Correct : 0
Incorrect : 0
Report Question
×
What's an issue?
Question is wrong
Answer is wrong
Other Reason
Want to elaborate a bit more? (optional)
Practice Class 11 Commerce Accountancy Quiz Questions and Answers
<
>
Support mcqexams.com by disabling your adblocker.
×
Please disable the adBlock and continue.
Thank you.
Reload page
