Trial Balance and Rectification of Errors Test 39

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Trial Balance and Rectification of Errors Test 39

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Weekly Quiz Competition

Question 1
1 / -0

spent on repair of office equipment debited to office equipment a/c. This will affect profit and loss a/c as __________.

A
Overstate profit by $$Rs 4500$$

B
Understate profit by $$Rs.4500$$

C
No affect at all

D
Debtors a/c will be overcast by $$Rs.4500$$

Solution

Repairs & Maintenance is a revenue expenditure. This has to be debited to expenses account in profit & loss account. This is an error of principle as revenue expenditure is recorded as capital expenditure and hence less expenses are booked against the income. Such expenses not being charged to the profit & loss account will overstated.
Question 2
1 / -0

While checking the accounts of ABC the following discrepancies were noticed, even though the trial balance was made to balance by putting the difference to suspense A/c.
(a) Sales day book for the month of June 2013 was found overcast by Rs. 7000
(b) A credit purchase of Rs.3,000 was omitted to be recorded in the day book.
(c) Rs.4,300 received from A credited to A's Rs.3,400
(d) Purchase of office equipment worth Rs.5,000 included in trading purchases.
From the above details while rectifying the mistake suspense a/c will be.

A
Debited by Rs.9,100

B
Credited by Rs.6,100

C
Debited by Rs.7,900

D
Credited by Rs.7,900

Solution

Solution to this will be as under:
(a) Sales day book for the month of June 2013 was found overcast by Rs. 7000: Suspense A/c will be credited by Rs.7000.
(b) A credit purchase of Rs.3,000 was omitted to be recorded in the day book: Its a complete omission of an entry, hence no affect on suspense a/c.
(c) Rs.4,300 received from A credited to A's Rs.3,400: This will affect suspense account of debit of Rs.900.
(d) Purchase of office equipment worth Rs.5,000 included in trading purchases: Its an error of principle, hence no affect on suspense a/c.

In Summary:
Credit to Suspense A/c Rs.7000
Debit to Suspense A/c Rs. 900
Net credit to Suspense A/c of Rs.6100
Question 3
1 / -0

An old furniture was sold for $$Rs. 750$$, but the amount entered in the Sales Day book as $$Rs. 570$$. On rectification of this error suspense A/c will be __________.

A
credited by $$Rs. 180$$

B
debited by $$Rs.180$$

C
debited by $$Rs.750$$

D
credited by $$Rs. 570$$

Solution

Sale of old furniture of $$Rs.750$$ is recorded as $$Rs.570$$, it is an error of commission as the amounts are wrongly taken. There will be a difference in trial balance of $$Rs.180$$ i.e $$Rs.750$$ - $$Rs.570$$.
To rectify the transaction, suspense account will be debited by $$Rs.180$$.
Question 4
1 / -0

Rs.4500 received from M/s Ram was credited to Mr Ram a/c.On rectification profit and loss a/c _______.

A
increase in profit by Rs. 4500

B
decrease in profit by Rs. 4500

C
no affect at all

D
debtors a/c will be overcast by Rs.4500
Question 5
1 / -0

Rectification of which types of errors requires opening of suspense A/c?

A
Errors of principle.

B
Complete omission.

C
Partial omission.

D
Errors of commission.

Solution

Partial omission of any transaction affect the agreement of trial balance. The difference in trial balance will be parked by opening suspense account. All such rectifications are passed through suspense a/c. Suspense account finally should not have any balance.
Question 6
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Particular Debit Rs. Credit Rs.
Sales 20,000
Purchases 15,000
Miscellaneous expenses 1,500
Salaries 3,500
Total 16,500 23,500
The difference in the above trial balance is due to __________.

A
wrong placing of sales account.

B
wrong placing of salaries account.

C
wrong placing of miscellaneous expenses account.

D
wrong placing of all accounts.
Question 7
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Which of the following errors will not affect the trial balance?

A
Wrong balancing of an account

B
Wrong totalling of an account

C
Writing an amount in the wrong account but on the correct side

D
Omission of an account from trial balance

Solution

The error of Principle does not affect the trial balance.
When the transaction amount is posted in the wrong account but on the correct side will not affect the trial balance.
Question 8
1 / -0

Purchase of office furniture of Rs. 1,200 has been debited to general expense account. It is __________.

A
a clerical error

B
an error of principle

C
an error of omission

D
a compensating error

Solution

An error which violates the fundamental accounting principles is an error of principle.
In the given question, capital expenditure is treated as revenue expense. It shows that the basic classification of capital and revenue expenditure is violated. Such an error is therefore an error of principle.
Question 9
1 / -0

Rent paid to landlord amounting Rs.500 was credited to Rent A/c with Rs.5,000. In the rectifying entry, Rent A/c will be debited with ________.

A
Rs. 5,000

B
Rs. 500

C
Rs. 5,500

D
Rs. 4,500
Question 10
1 / -0

Which of the following would not be revealed by preparation of a trial balance?

A
Payment of wages entered in the Cash Book but not- posted to Wages A/c in the ledger.

B
Sale of an old machinery credited to Sales A/c.

C
Rent paid Rs.750 entered as Rs.570 in the Rent A/c but correctly entered in the Cash Book.

D
Posting a debit entry to the credit of an account.

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Particular	Debit Rs.	Credit Rs.
Sales		20,000
Purchases	15,000
Miscellaneous expenses	1,500
Salaries		3,500
Total	16,500	23,500

Trial Balance and Rectification of Errors Test 39

Result

Trial Balance and Rectification of Errors Test 39

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Rank

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Question 1

Overstate profit by $$Rs 4500$$

Understate profit by $$Rs.4500$$

No affect at all

Debtors a/c will be overcast by $$Rs.4500$$

Solution

Question 2

Debited by Rs.9,100

Credited by Rs.6,100

Debited by Rs.7,900

Credited by Rs.7,900

Solution

Question 3

credited by $$Rs. 180$$

debited by $$Rs.180$$

debited by $$Rs.750$$

credited by $$Rs. 570$$

Solution

Question 4

increase in profit by Rs. 4500

decrease in profit by Rs. 4500

no affect at all

debtors a/c will be overcast by Rs.4500

Question 5

Errors of principle.

Complete omission.

Partial omission.

Errors of commission.

Solution

Question 6

wrong placing of sales account.

wrong placing of salaries account.

wrong placing of miscellaneous expenses account.

wrong placing of all accounts.

Question 7

Wrong balancing of an account

Wrong totalling of an account

Writing an amount in the wrong account but on the correct side

Omission of an account from trial balance

Solution

Question 8

a clerical error

an error of principle

an error of omission

a compensating error

Solution

Question 9

Rs. 5,000

Rs. 500

Rs. 5,500

Rs. 4,500

Question 10

Payment of wages entered in the Cash Book but not- posted to Wages A/c in the ledger.

Sale of an old machinery credited to Sales A/c.

Rent paid Rs.750 entered as Rs.570 in the Rent A/c but correctly entered in the Cash Book.

Posting a debit entry to the credit of an account.

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