Trial Balance and Rectification of Errors Test 49

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Trial Balance and Rectification of Errors Test 49

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Weekly Quiz Competition

Question 1
1 / -0

Rs.200 received from Shyam whose account was previously written off as bad debts should be credited to:

A
Shyam A/c

B
Bad debts recovered A/c

C
Cash A/c

D
None

Solution

An account written off as bad can not be reopened if the amount (or a part of it) is recovered later. The amount recovered is treated as an income and credited to bad debts recovered account.
Question 2
1 / -0

The accountant tallies his trial balance by putting the difference on shorter side as:

A
Debit account

B
Credit account

C
Suspense account

D
Compensating account

Solution

When accounting errors cause disagreement of trial balance, suspense account is opened to tally the trial balance.
Question 3
1 / -0

Which type of error is corrected by reversing the incorrect entry and recording the correct one?

A
Error of omission

B
Error of commission

C
Error of principle

D
Compensating error

Solution

Errors of commission involve recording transactions but with incorrect details. They are rectified by reversing the incorrect entry and recording the correct one.
Question 4
1 / -0

Under casting of sales book is corrected by _____ sales account.

A
Debiting

B
Crediting

C
Both (A) and(B)

D
None of these

Solution

Under casting of sales book implies under recording of sales which will be rectified by crediting the sales account.
Question 5
1 / -0

If some credit sale to customer is correctly recorded in Sale book but is omitted to be recorded to Customer’s account then what type of error will it be:

A
Error of posting

B
Error of casting

C
Error of recording

D
Error of totaling

Solution

Error of posting occurs when a transaction is correctly recorded in one ledger account but is omitted or incorrectly recorded in another related ledger account. In this scenario, the credit sale to the customer is correctly recorded in the Sales book but is omitted to be recorded in the customer's account. This discrepancy between the Sales book and the customer's account constitutes an error of posting.
Question 6
1 / -0

What is the purpose of preparing a Suspense Account?

A
To identify errors in the Trial Balance.

B
To temporarily hold entries with unidentified errors.

C
To permanently record errors discovered during the accounting period.

D
To report errors to stakeholders in the financial statements.

Solution

Suspense Account is used to temporarily hold entries with unidentified errors until they are investigated and corrected, ensuring the accuracy of the financial records.
Question 7
1 / -0

Which of the following is true relating to error of principle?

A
Principles are violated or ignored

B
It will have an impact on financial statements

C
May lead to under/over stating of income or assets or liabilities

D
All of these

Solution

Errors of principle arise due to violation of accounting principles. For example, if a capital receipt is recorded as a revenue receipt or vice versa, it may lead to under/over stating of income or assets or liabilities etc and will therfore have an impact on the financial statements.
Question 8
1 / -0

Which of the following is not an error of commission?

A
Wrong balancing of machinery account

B
Overcasting of sales book

C
Credit sales to Pawan Rs.5000 credited to his account

D
Cash sales not recorded in cash book

Solution

"Cash sales not recorded in cash book" is not an error of commission but rather an error of omission. An error of commission involves recording a transaction incorrectly, whereas an error of omission involves failing to record a transaction altogether.
Question 9
1 / -0

Which of the following errors would not be detected by the Trial Balance?

A
Recording a purchase as a sale.

B
Omitting to record a cash payment for expenses.

C
Transposing digits in a transaction amount.

D
Recording a purchase return as a purchase.

Solution

Errors such as transposing digits do not affect the equality of debits and credits in the Trial Balance, so they would not be detected by it.
Question 10
1 / -0

Which type of error involves recording a transaction at an amount not in accordance with accounting principles?

A
Errors of omission

B
Errors of commission

C
Errors of principle

D
Errors of original entry

Solution

Errors of principle involve recording a transaction at an amount that is not in accordance with accounting principles, such as recording a personal expense as a business expense.

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Re-Attempt Weekly Quiz Competition

Trial Balance and Rectification of Errors Test 49

Result

Trial Balance and Rectification of Errors Test 49

Score

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Rank

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Question 1

Shyam A/c

Bad debts recovered A/c

Cash A/c

None

Solution

Question 2

Debit account

Credit account

Suspense account

Compensating account

Solution

Question 3

Error of omission

Error of commission

Error of principle

Compensating error

Solution

Question 4

Debiting

Crediting

Both (A) and(B)

None of these

Solution

Question 5

Error of posting

Error of casting

Error of recording

Error of totaling

Solution

Question 6

To identify errors in the Trial Balance.

To temporarily hold entries with unidentified errors.

To permanently record errors discovered during the accounting period.

To report errors to stakeholders in the financial statements.

Solution

Question 7

Principles are violated or ignored

It will have an impact on financial statements

May lead to under/over stating of income or assets or liabilities

All of these

Solution

Question 8

Wrong balancing of machinery account

Overcasting of sales book

Credit sales to Pawan Rs.5000 credited to his account

Cash sales not recorded in cash book

Solution

Question 9

Recording a purchase as a sale.

Omitting to record a cash payment for expenses.

Transposing digits in a transaction amount.

Recording a purchase return as a purchase.

Solution

Question 10

Errors of omission

Errors of commission

Errors of principle

Errors of original entry

Solution

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