Trial Balance and Rectification of Errors Test 27

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Trial Balance and Rectification of Errors Test 27

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Question 1
1 / -0

Which of the following errors will not be revealed by the trial balance?

A
Errors of principle

B
Wrong balancing of an account

C
Wrong totalling of an account

D
All of the above

Solution

Option A is correct.
Only error in principle is not revealed in the trial balance.
When there is error in totaling of accounts, there will be error in the balancing of the account.
This balance is transferred to the trial balance and if the balance is wrong the trial balance will not tally and it will be easily revealed
Question 2
1 / -0

Rs. 1,000 being the monthly total of discount allowed to customers was credited to discount account in the ledger. If rectification is done before preparation of trial balance then which of the following is correct?

A
Discount A/c Dr. 2,000
To Suspense A/c 2,000

B
Discount A/c Dr. 1,000
To Suspense A/c 2,000

C
Credit the Discount Account with Rs. 2,000 saying "To Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

D
Debit the Discount Account with Rs. 2,000 saying "By Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

Solution

The Correct Rectification entry in the given case would be
Debit the Discount Account with Rs. 2,000 saying "By Rectification of wrong credit of Rs. 1,000 for discount allowed... Rs. 2,000.
As the discount is wrongly credited, therefore, for rectification, the discount allowed needing to be debited with the double amount.
Question 3
1 / -0

Which of the following statements is correct?

A
The trial balance is prepared after preparing the profit and loss account

B
The trial balance shows only balances of assets and liabilities

C
The trial balance shows only nominal account balances

D
The trial balance has no statutory importance from the point of view of law

Solution

The purpose of a trial balance is to prove that the value of all the debit value balances equal the total of all the credit value balances. If the total of the debit and the credit columns do not match then there is an error in the ledger accounts. This error must be found before a profit and loss statement and balance sheet can be produced. Apart from this there is no statutory importance of trial balance from the point of view of law.
Question 4
1 / -0

If an amount paid for servicing vehicles has been posted in error to Motor Vehicles account the journal entry necessary to correct this error should require which of the following _________________.

A
Debit Vehicle Maintenance A/c and credit Motor Vehicles A/c

B
Debit Cash A/c and credit Motor Vehicles A/c

C
Debit Motor Vehicles A/c and credit Vehicle Maintenance A/c

D
Debit Vehicle Maintenance A/c and credit Cash A/c

Solution

If an amount paid for servicing vehicles has been posted in error to Motor Vehicles account
Incorrect Entry
Motor Vehicles a/c Dr.
To Cash a/c

Correct Entry
Vehicle Maintenance A/c Dr.
To Cash a/c

Rectifying Entry
Vehicle Maintenance A/c Dr.
To credit Motor Vehicles A/c
Question 5
1 / -0

A credit sale of Rs.1,000 to Santhanam has been wrongly passed through the purchases book. Which of the following rectification entry is correct?

A
Suspense A/c Dr. 2,000

To Sales A/c 1,000

To Purchases A/c 1,000

B
Purchases A/c Dr. 2,000

To Santhanam A/c 2,000

C
Santhanam A/c Dr. 2,000

To Sales A/c 1,000

To Purchases A/c 1,000

D
Sales A/c Dr. 1,000

Purchases A/c Dr. 1,000

To Santhanam A/c 2,000

Solution

For the given credit sale, the correct entry that should be made is:
=> Santhanam A/c Dr. 1000
To Sales A/c 1000
The entry which was made earlier is:
=> Purchases A/c Dr. 1000
To Santhanam A/c 1000
Therefore, to nullify the effect of above entry and record the correct entry, the following rectification entry will be made:
=> Santhanam A/c Dr. 2000
To Purchases A/c 1000
To Sales A/c 1000
Question 6
1 / -0

Which of the following error will disturb the balancing of the trial balance?

A
Recording in the purchases journal an in-voice for acquiring a non current asset for Rs. 60,000.

B
Adding up the returns inwards journal as Rs. 11,400 instead of Rs. 2,12,600.

C
Recording a sales invoice for Rs. 5,600 as Rs. 6,500 in the sales journal.

D
Failing to record a purchase invoice for Rs. 54,000 in the purchases journal.

Solution

Trial balance is prepared with the balances of the ledger accounts, if the balance of any ledger account is incorrect, the trial balance will not tally. Return inwards or sales return account always has a debit balance, when the balance of this account is understated, the credit side total of the trial balance will exceed the debit side total. This will lead to unstable trial balance.
Question 7
1 / -0

In case the individual ledger account were accurate in all respect but a trial balance did not tally, there may be:

A
Wrong recording in book of original entry.

B
Wrong recording in Journal Proper but not posted at all

C
Errors of posting involving the position to wrong account on correct side with correct amount

D
Omission of an account from Trial Balance

Solution

Trial balance records the debit and credit balances of all the accounts, to find the arithmetical accuracy of the books of accounts. If the trial balance is not tallying then there can be various reasons for this disparity.
If an individual ledger account is accurate in all respect and then trial balance is not agreeing it can be due to omission of an account from trial balance. This implies the absence of a debit or credit balance as a whole from the trial balance. The trial balance does not agrees in this case because the effect of the transactions of the account omitted is present in the trial balance. Here the double entry system of accounting is not fulfilled and thus trial balance does not agrees.
Question 8
1 / -0

Which of the following errors will affect the trial balance?

A
A Credit Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

B
A Cash Sale of goods to X$$Rs.17$$ credited to X

C
A Credit sale of furniture to X $$Rs.17$$ posted as $$Rs.71$$

D
None of the above

Solution

When goods are sold on credit, the entry passed is
Debtor's A/c Dr
To Sales A/c
When the amount posted to the accounts is incorrect but same , the trial balance will not tally. This is because for credit sale of goods the value of stock with the firm has to reduce.
In the trial balance even though the error is of same amount but the stock will show the amount of goods remaining in the business, which will lead to unstable trial balance.
Question 9
1 / -0

The trial balance checks ______________ .

A
the honesty of the book - keeper.

B
the honesty of the accountant

C
the honesty of the cashier

D
the arithmetical accuracy of the books of accounts

Solution

Trial balance is the list of balances of all ledger accounts and cash book. It is an instrument for checking and testing the arithmetical accuracy of the posting of entries from journal to ledger. It is to check the accuracy of original records before preparing the final accounts so that the final account is error free, and going through books again after preparing final accounts will take a lot of time.
Question 10
1 / -0

Which of the following errors will not affect the trial balance ?

A
A credit Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

B
A Cash Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

C
A Credit Sale of furniture to X $$Rs.17$$ posted as $$Rs.71$$

D
None of the above

Solution

For credit sale of furniture the entry passed is -
Debtor's A/c Dr
To Furniture A/c
When the amount posted in the accounts is incorrect but same, the trial balance will tally. The balances of ledger accounts is transferred to the trial balance and the balance of these accounts will not affect the agreement of the trial balance.

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Re-Attempt Weekly Quiz Competition

Trial Balance and Rectification of Errors Test 27

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Trial Balance and Rectification of Errors Test 27

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SHARING IS CARING

Question 1

Errors of principle

Wrong balancing of an account

Wrong totalling of an account

All of the above

Solution

Question 2

Discount A/c Dr. 2,000 To Suspense A/c 2,000

Discount A/c Dr. 1,000 To Suspense A/c 2,000

Credit the Discount Account with Rs. 2,000 saying "To Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

Debit the Discount Account with Rs. 2,000 saying "By Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

Solution

Question 3

The trial balance is prepared after preparing the profit and loss account

The trial balance shows only balances of assets and liabilities

The trial balance shows only nominal account balances

The trial balance has no statutory importance from the point of view of law

Solution

Question 4

Debit Vehicle Maintenance A/c and credit Motor Vehicles A/c

Debit Cash A/c and credit Motor Vehicles A/c

Debit Motor Vehicles A/c and credit Vehicle Maintenance A/c

Debit Vehicle Maintenance A/c and credit Cash A/c

Solution

Question 5

Suspense A/c Dr. 2,000 To Sales A/c 1,000 To Purchases A/c 1,000

Purchases A/c Dr. 2,000 To Santhanam A/c 2,000

Santhanam A/c Dr. 2,000 To Sales A/c 1,000 To Purchases A/c 1,000

Sales A/c Dr. 1,000Purchases A/c Dr. 1,000 To Santhanam A/c 2,000

Solution

Question 6

Recording in the purchases journal an in-voice for acquiring a non current asset for Rs. 60,000.

Adding up the returns inwards journal as Rs. 11,400 instead of Rs. 2,12,600.

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.

Solution

Question 7

Wrong recording in book of original entry.

Wrong recording in Journal Proper but not posted at all

Errors of posting involving the position to wrong account on correct side with correct amount

Omission of an account from Trial Balance

Solution

Question 8

A Credit Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

A Cash Sale of goods to X$$Rs.17$$ credited to X

A Credit sale of furniture to X $$Rs.17$$ posted as $$Rs.71$$

None of the above

Solution

Question 9

the honesty of the book - keeper.

the honesty of the accountant

the honesty of the cashier

the arithmetical accuracy of the books of accounts

Solution

Question 10

A credit Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

A Cash Sale of goods to X $$Rs.17$$ posted as $$Rs.71$$

A Credit Sale of furniture to X $$Rs.17$$ posted as $$Rs.71$$

None of the above

Solution

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Discount A/c Dr. 2,000
To Suspense A/c 2,000

Discount A/c Dr. 1,000
To Suspense A/c 2,000

Suspense A/c Dr. 2,000

To Sales A/c 1,000

To Purchases A/c 1,000

Purchases A/c Dr. 2,000

To Santhanam A/c 2,000

Santhanam A/c Dr. 2,000

To Sales A/c 1,000

To Purchases A/c 1,000

Sales A/c Dr. 1,000

Purchases A/c Dr. 1,000

To Santhanam A/c 2,000