Trial Balance and Rectification of Errors Test 22

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Trial Balance and Rectification of Errors Test 22

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Question 1
1 / -0

When two or more errors are committed in such a way the effect of one error is compensated by another error. Which type of error is this?

A
Error of Commission

B
Compensating Error

C
Error of Principle

D
None of these

Solution

When an error is compensated by another error, it is called a compensating error. For example, an amount of Rs.5000 received from Ram is credited to his account as Rs.500, on the other hand, an amount of Rs.5000 paid to Sunil is debited to his account as Rs.500. In this case, one short credit of Rs.4500 is compensated by short debit of Rs.4500.
One error has compensated the other error.
Question 2
1 / -0

$$Rs.1,000$$ was paid as rent to the landlord Krishna. This amount was debited to Krishna's personal account. This error will __________.

A
affect agreement of the trial balance

B
not affect agreement of the trial balance

C
affect the suspense account

D
none of the above

Solution

Rs.1000 paid for rent need to be debited to Rent A/c but wrongly debited to his landlord Krishna'a a/c. Though the accounting entry is having an error but this will not affect the trial balance as ultimately Rs. 1000 debited.

Rectification entry will be as under:

Rent A/c Dr. 1000
To Krishna A/c 1000
Question 3
1 / -0

If there is an error in trial balance which is not affecting its total, will it affect any accounting procedure?

A
Yes

B
No

C
Don't know

D
Partly Yes

Solution

If trial balance agrees, it is assumes that the books are arithmetically correct. But it does proves that the books are error free. There are errors which does not give any effect in the total of trial balance but errors are prevailing in the books. But such errors will not affect any accounting procedure.
Question 4
1 / -0

Legal expenses paid to Mohan is debited to his personal account. This is an example of error _________.

A
duplication

B
omission

C
commission

D
principle

Solution

Legal expenses paid to Mohan need to be debited to legal expenses account not to the personal account. It is an error of commission.
Rectification entry has to be passed as:

Legal Expenses A/c Dr.
To Mohan A/c
Question 5
1 / -0

It SA/cs is done and by mistake A's account is transferred to Purchase No in such a case which accounts are affected?

A
Purchase a/c

B
A's a/c

C
Both (a) and (b)

D
None of the above.
Question 6
1 / -0

What is possible if the trail balance of a company agrees?

A
There are two mistakes in the recordings made

B
There may be some mistakes in the recording of books

C
Both a and b

D
None of the above

Solution

If trial balance agrees, this is assumed that the books of account are arithmetically correct. But it does not confirm that books of account are free from error. Below are the example where even if the trial balance agrees, chance of errors are there:
1) There are two mistakes in the recording made- This is called compensating error where the difference of one error is nullify by the other error.
2) There may be some mistakes in the recording of books- For example, in case of error of principle, the trial balance will agree but the error is prevailing in the books.
Question 7
1 / -0

Company purchased furniture worth Rs 1 lakh but it was wrongly recorded remedy to this problem will affect__________.

A
One account

B
Two account

C
It is an independent account

D
It can not be rectified

Solution

Company purchased furniture worth Rs 1 lakh but it was wrongly recorded, It will affect Two Account as it will increase the account in which it is wrongly debited and will decrease the furniture account.
For Example : If Furniture purchased costing Rs 500, wrongly entered in purchase book then the correct entry should be Furniture A/c Dr to Purchases A/c by Rs 500.
Question 8
1 / -0

Because of the lack of proper fundamental accounting knowledge _______ type of error is done.

A
partial omission error

B
compensating error

C
error of principle

D
all of the above

Solution

An error of principle occurs when there is lack of proper fundamental accounting knowledge. An error of principle occurs when the basic fundamental principles of accounting are violated. Examples:- recoding a capital expenditure as a revenue expenditure.
Question 9
1 / -0

A new accountant did credit Rs 500 instead of Rs 50,000. It is an error of ___________.

A
error of commission

B
error of complete omission

C
error principle

D
error of duplication

Solution

If an amount is wrongly posted or posted in a wrong account, it is an error of commission.
Rs.50000 credit is posted as Rs.500, it is an error of commission. In this case, there will be a difference in trial balance of Rs.49500.
Question 10
1 / -0

Commission is paid for purchase of a land. It will be ___________.

A
disclosed in trial balance

B
not disclosed in trial balance

C
will be disclosed in profit and loss account

D
will be disclosed in balance sheet

Solution

All incidental expenses pertaining to the purchase of any asset should be debited to the respective asset account.
Commission paid for purchase of land to be added to the cost of land. Hence this amount will not disclosed in the trial balance. It should be part of land value.

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Re-Attempt Weekly Quiz Competition

Trial Balance and Rectification of Errors Test 22

Result

Trial Balance and Rectification of Errors Test 22

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Rank

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SHARING IS CARING

Question 1

Error of Commission

Compensating Error

Error of Principle

None of these

Solution

Question 2

affect agreement of the trial balance

not affect agreement of the trial balance

affect the suspense account

none of the above

Solution

Question 3

Yes

No

Don't know

Partly Yes

Solution

Question 4

duplication

omission

commission

principle

Solution

Question 5

Purchase a/c

A's a/c

Both (a) and (b)

None of the above.

Question 6

There are two mistakes in the recordings made

There may be some mistakes in the recording of books

Both a and b

None of the above

Solution

Question 7

One account

Two account

It is an independent account

It can not be rectified

Solution

Question 8

partial omission error

compensating error

error of principle

all of the above

Solution

Question 9

error of commission

error of complete omission

error principle

error of duplication

Solution

Question 10

disclosed in trial balance

not disclosed in trial balance

will be disclosed in profit and loss account

will be disclosed in balance sheet

Solution

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