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Trial Balance and Rectification of Errors Test 30

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Trial Balance and Rectification of Errors Test 30
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  • Question 1
    1 / -0
    Both the discount columns of the cash book were omitted to be posted in the ledger. This error-
    Solution
    When both the discount columns are omitted to be posted in the ledger, this is known as error of posting. This error affects the trial balance, here a debit as well as a credit account of the trial balance is missing which causes differences in the balance of the trial balance. The two discount accounts have different balances which may not be the same to cancel the net effect of the omission.
    This will affect the profit because the balances of the discount accounts is included in the profit and loss account to calculate the net profit, so if these accounts are omitted then the profit will not be correct.
  • Question 2
    1 / -0
    Total of Sales Book cost Rs. 900 short.This error ____________ .
    Solution
    When the total of any account is short, this is an error of casting. This will affect the agreement of trial balance because this is one sided error. In the case the debit side will be greater that the credit side because sales account always has a credit balance and the sales account is short here. So the trial balance will not tally. 
    This will affect the profit of the year as net profit is calculated from the gross profit which is affected by the increase and decrease in the balance of sales account.
  • Question 3
    1 / -0
    Rent paid to landlord, and Ram's account has been debited.
     This error ____________ .
    Solution
    When ram has been debited for rent paid to landlord, this is an error of posting to the wrong account. 
    This is when posting is made to a wrong account but on the correct side. This error will not affect the agreement of the trial balance.
    This is because even though the entry is passed to the wrong account, but the accounting treatment is correct i.e., the correct entry for this transaction should be -
    Rent A/c        Dr 
          To cash A/c 
    Instead of this the incorrect entry passed was 
    Ram A/c        Dr 
          To Cash A/c 
    Here instead of rent account , ram's account is debited. This does not affects the agreement of the trial balance.
    Rent being revenue expenditure is deducted from the current year profit, ram's account being personal account is not included in the profit and loss account.  This affects the actual profit of the year.
  • Question 4
    1 / -0
    Goods sold to Y for Rs.10,000 passed through the Purchase Book. The error will result in _______________.
  • Question 5
    1 / -0
    Good returned to X for Rs.10,000 passed through the purchase Book. The error will result in ______________.
  • Question 6
    1 / -0
    Which of the following errors will not affect the Trial Balance?
    Solution
    The trial balance is not affected when entry is not posted at all. This is because the incorrect entry of the journal has not been posted to the ledger accounts at all. This means the incorrect balance is not transferred to the trial balance, which will not be affected.
  • Question 7
    1 / -0
    Goods Purchased from Y for Rs. 4000, now returned, are passed through Purchase book. This is an error of ______.
    Solution
    In the given question entry should have been recorded in purchase return book but is recorded in purchase book. This is an error of principle. An error of principle occurs when an entry has been passed in the wrong account. These errors violate the basic fundamentals of accounting.
  • Question 8
    1 / -0
    Sales to Meena Rs. 143 was debited as 413 _________________.
  • Question 9
    1 / -0
    Amount of Rs. 15000 taken for personal use from business account recorded as business expenses. This is an error of ______.
    Solution
    The amount of 15,000 taken for personal use for business account should have been debited to drawings account, but is debited as business expenses.
    This is an error of principle. An error of principle occurs when an entry has been passed in the wrong account. These errors violate the basic fundamentals of accounting.
  • Question 10
    1 / -0
    Goods costing Rs. 25000 destroyed by fire were not recorded. This is an ______.
    Solution
    Error of omission is when a transaction is completely omitted to be recorded or recorded in journal but omitted to be posted in ledger accounts. Such errors don not affect the agreement of the trial balance. this is because trial balance is prepared from the ledger account balances and if the transaction is not posted into the ledger accounts, they would not affect the accounts. 
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