Trial Balance and Rectification of Errors Test 21

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Trial Balance and Rectification of Errors Test 21

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Weekly Quiz Competition

Question 1
1 / -0

Ahmad Industries want to make payment to supplier in the form of a pay order. The bank deducted Rs.160 as service charges without its knowledge. The error is known as _________.

A
error of commission

B
error of omission

C
error of original entry

D
error of principle

Solution

Bank Charges have to be recorded as an expenses by crediting the bank account. Bank charges are directly debited by the bank, hence while doing the bank reconciliation, an accounting entry need to be passed. This is an error of commission.
Bank Charges A/c Dr. 160
To Bank A/c 160
Question 2
1 / -0

The statement showing balance of all the ledger accounts is known as ______________.

A
Trial balance

B
Balance sheet

C
Bank reconciliation statement

D
Profit and loss account.

Solution

Trial Balance may be defined as a statement which contains balances of all ledger accounts on a particular date.
Question 3
1 / -0

Which of the following errors will not cause the disagreement of Trial Balance?

A
Rs. 821 received from Ravi has been debited to Kavi

B
A purchase of Rs. 281 Irom Sanju has been debited to his account as Rs. 281

C
An invoice for Rs. 490 is entered in the SA/cs Book as Rs. 840

D
All of the above.
Question 4
1 / -0

In case of Trial Balance, balance comes from _________.

A
Journal

B
Ledger

C
Balance Sheet

D
Profit & Loss A/c.

Solution

Trial Balance may be defined as a statement which contains balances of all ledger accounts on a particular date.
Question 5
1 / -0

After preparing the Trial Balance, the accountant finds that the total of the debit side of Trial Balance is short by Rs. 1,000. This difference will be _________.

A
credited to suspense account

B
debited to suspense account

C
adjusted to any of account having debit balance

D
adjusted to any of account having credit balance

Solution

All errors have to be rectified before the finalization of books. If errors are not located, the trial balance will not agree. In such situation the difference amount has to be parked temporarily in a account which is named as suspense account.
If the total of the debit side of trial balance is short by Rs.1000, it will be debited to suspense account.
Question 6
1 / -0

The credit side of trial balance show __________.

A
Bank

B
Cash

C
Equipment

D
None of the above

Solution

Assets account always shows debit balance. Bank, cash and equipment are assets and will always have debit balance. These are to be shown in the debit side of trial balance.
Question 7
1 / -0

If a credit sale of Rs. 15,400 to Pram had been entered as Rs. 14,500. The Journal entry for rectifying the error would be:

A
Debit Cash Account and Credit Sale Account with Rs. 900

B
Debit Prem Account and Credit Sales Account with Rs. 900

C
Debit Sales Account and Credit Pram Account with Rs. 900

D
Debit Prem, Account and Credit Sales Account with Rs. 15,400

Solution

Its an error of commission. Amount is wrongly taken as Rs.14500 instead of Rs.15400. Journal entry is passed with less amount of Rs.900. Hence additional entry for Rs.900 need to be passed further:

Prem A/c Dr. 900
To Sales A/c 900
Question 8
1 / -0

Which of the following errors is an error of commission?

A
Sales of Rs. 1,000 was recorded in the purchase journal.

B
Salary paid to Mohan and Vikas have been debited to their personal accounts.

C
The total of sales journal has not been posted to the sales account.

D
Repairs to building have been debited to building account.

Solution

Option D is correct answer.
Error of commission is that when there is an error in posting of an amount or there is an error in posting in the correct account.
Here repairs to building have been debited to building account which is an error of posting in wrong account.
Question 9
1 / -0

Which of the following errors will result into non-agreement of the trial balance?

A
Totaling the returns inwards journal as $$Rs. 11,400$$ instead of $$Rs. 12,600$$.

B
Recording a sales invoice for $$Rs. 5,600$$ as $$Rs. 6.500$$ in the Sales Journal.

C
Failing to record a purchase invoice for $$Rs. 54,000$$ in the Purchases Journal.

D
Recording in the Purchases Journal, an invoice, for acquiring a noncurrent asset for $$Rs. 60,000$$.
Question 10
1 / -0

Error of principle will not permit _________.

A
correct total of the balance sheet

B
correct total of the trial balance

C
the trial balance to agree

D
none of the above

Solution

While doing the accounting, if fundamental rule of accounting are not followed, there are possibilities of error of principle. Like if the capital expenditure are debited as revenue expenditure or vice -versa. In case of error of principle, balance sheet might not have the correct total as capital expenditure is debited to revenue expenditure, than assets will show lesser value.

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Trial Balance and Rectification of Errors Test 21

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Trial Balance and Rectification of Errors Test 21

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SHARING IS CARING

Question 1

error of commission

error of omission

error of original entry

error of principle

Solution

Question 2

Trial balance

Balance sheet

Bank reconciliation statement

Profit and loss account.

Solution

Question 3

Rs. 821 received from Ravi has been debited to Kavi

A purchase of Rs. 281 Irom Sanju has been debited to his account as Rs. 281

An invoice for Rs. 490 is entered in the SA/cs Book as Rs. 840

All of the above.

Question 4

Journal

Ledger

Balance Sheet

Profit & Loss A/c.

Solution

Question 5

credited to suspense account

debited to suspense account

adjusted to any of account having debit balance

adjusted to any of account having credit balance

Solution

Question 6

Bank

Cash

Equipment

None of the above

Solution

Question 7

Debit Cash Account and Credit Sale Account with Rs. 900

Debit Prem Account and Credit Sales Account with Rs. 900

Debit Sales Account and Credit Pram Account with Rs. 900

Debit Prem, Account and Credit Sales Account with Rs. 15,400

Solution

Question 8

Sales of Rs. 1,000 was recorded in the purchase journal.

Salary paid to Mohan and Vikas have been debited to their personal accounts.

The total of sales journal has not been posted to the sales account.

Repairs to building have been debited to building account.

Solution

Question 9

Totaling the returns inwards journal as $$Rs. 11,400$$ instead of $$Rs. 12,600$$.

Recording a sales invoice for $$Rs. 5,600$$ as $$Rs. 6.500$$ in the Sales Journal.

Failing to record a purchase invoice for $$Rs. 54,000$$ in the Purchases Journal.

Recording in the Purchases Journal, an invoice, for acquiring a noncurrent asset for $$Rs. 60,000$$.

Question 10

correct total of the balance sheet

correct total of the trial balance

the trial balance to agree

none of the above

Solution

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