Trial Balance and Rectification of Errors Test 12

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Trial Balance and Rectification of Errors Test 12

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Weekly Quiz Competition

Question 1
1 / -0

Suspense Account in the trial balance will be entered in the _________.

A
manufacturing A/c

B
trading A/c

C
profit & loss A/c

D
balance sheet

Solution

There are certain transactions which requires more clarity or there are some errors which are not rectified before the finalization of accounts. All such entries are parked in a temporary account known as suspense account.

Suspense account will be shown in the balance sheet either on asset side or liabilities side, depending on the balance of suspense account.
Question 2
1 / -0

Errors which affect only one account can be __________.

A
Errors of complete omission

B
Errors of principle

C
Errors of posting

D
None of the above
Question 3
1 / -0

An item of Rs.72 has been debited to a personal account as Rs.27, is an error of __________.

A
commission

B
omission

C
principle

D
none of these

Solution

Error of commission is that where any transaction is recorded erroneously-partially or wholly.
Here, the transaction is recorded in the correct account on the correct side but at the wrong amount.
Therefore, such error is classified as an error of commission.
Question 4
1 / -0

A trial balance is a ________________.

A
Real Account

B
Nominal Account

C
List of balances

D
Personal Account

Solution

A trial balance is a list of all the general ledger accounts (both revenue and capital) contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance.
Question 5
1 / -0

__________ does not help in assuming accuracy of balances of various accounts and preparation of the financial statements.

A
Totals Method

B
Balances Method

C
Totals-cum-balances Method

D
None of the above

Solution

In total method, total of each side in the ledger is ascertained separately and shown in the trial balance in the respective columns. However, this method is not widely used in practice, as it does not help in assuming accuracy of balances of various accounts and preparation of financial statements.
Question 6
1 / -0

______ is time consuming and hardly serves any addition or special purpose.

A
Total Method

B
Balances Method

C
Totals-cum-balances Method

D
None of the above

Solution

Total-cum-balances Method is a combination of totals method and balances method. Under this method four columns for amount are prepared. Two columns for writing the debit and credit totals of various accounts and two columns for writing the debit and credit balances of these accounts. This method is time consuming and hardly serves any additional or special purpose.
Question 7
1 / -0

Error of omission arises when ___________.

A
any transaction is left to be recorded

B
any transaction is recorded in a fundamentally incorrect manner

C
any transaction is incorrectly recorded, either wholly or partially

D
none of the above takes place

Solution

Error of omission means when something is omitted to be recorded either wholly or partially and affects the Trial Balance.
When a particular transaction is completely not recorded it is known as complete omission whereas a situation where a transaction is partially recorded it is known as partial omission as the complete transaction is not recorded in books.
Question 8
1 / -0

_______ is the most widely used method in practice.

A
Total Method

B
Balance Method

C
Totals-cum-balances Method

D
None of the above

Solution

Under balances method trial balance is prepared by showing the balances of all ledger accounts and then totalling up the debit and credit columns of the trial balance to assure their correctness. Balances Method is the most widely used method in practice.
Question 9
1 / -0

Sales to Ram, Rs.336, posted to his account as Rs.363 will affect _____________.

A
Sales account

B
Ram's account

C
Cash account

D
all of the above

Solution

As Ram account is debited with 363 instead of 336 which will result in affecting his account.
Question 10
1 / -0

If the closing stock at the end of the year is overstated by Rs.7,500, the error cause an_______________________.

A
Overstatement of cost of goods sold for the year by Rs. 7,500

B
Understatement of gross profit for the year by Rs. 7,500

C
Overstatement of net income for the year by Rs. 7,500

D
Understatement of net income for the year by Rs. 7,500

Solution

If the closing stock at the end of the year is overstated by RS-7,500, the error cause an overstatement of net income for the year by RS-7,500. Overstatement of closing stock reduces the value of cost of goods sold thereby increasing the profit.

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Re-Attempt Weekly Quiz Competition

Trial Balance and Rectification of Errors Test 12

Result

Trial Balance and Rectification of Errors Test 12

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Rank

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SHARING IS CARING

Question 1

manufacturing A/c

trading A/c

profit & loss A/c

balance sheet

Solution

Question 2

Errors of complete omission

Errors of principle

Errors of posting

None of the above

Question 3

commission

omission

principle

none of these

Solution

Question 4

Real Account

Nominal Account

List of balances

Personal Account

Solution

Question 5

Totals Method

Balances Method

Totals-cum-balances Method

None of the above

Solution

Question 6

Total Method

Balances Method

Totals-cum-balances Method

None of the above

Solution

Question 7

any transaction is left to be recorded

any transaction is recorded in a fundamentally incorrect manner

any transaction is incorrectly recorded, either wholly or partially

none of the above takes place

Solution

Question 8

Total Method

Balance Method

Totals-cum-balances Method

None of the above

Solution

Question 9

Sales account

Ram's account

Cash account

all of the above

Solution

Question 10

Overstatement of cost of goods sold for the year by Rs. 7,500

Understatement of gross profit for the year by Rs. 7,500

Overstatement of net income for the year by Rs. 7,500

Understatement of net income for the year by Rs. 7,500

Solution

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