Trial Balance and Rectification of Errors Test 6

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Trial Balance and Rectification of Errors Test 6

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Question 1
1 / -0

Error occurred due to wrong posting are called as errors of ___________.

A
Compensating

B
Omission

C
Principle

D
Commission
Solution
Errors are classified as:
Error of Omission
Error of Commission
Error of Principle
Compensating error
Error where the posing is done wrongly are called error of commission. For example, rent of $$Rs.5000$$ is recorded as $$Rs.500$$.
Question 2
1 / -0

One sided errors are disclosed by _________.

A
Trial Balance

B
Suspense A/c

C
Journal

D
Ledger A/c

Solution

One-sided errors are those errors which affects only one side of the trial balance, or may have an effect on only one account out of two.
These errors are easily classified by the trial balance, as they result in non-agreement of the trial balance.
Question 3
1 / -0

Select the most appropriate alternative from those given below and rewrite the sentence.
Mistakes involving wrong posting are called as errors of __________.

A
Compensating

B
Omission

C
Principle

D
Posting clerical error

Solution

Option D is the correct answer.
Errors of posting include posting wrong amounts, posting on wrong side of accounts, wrong totaling or carrying forward, and wrong balancing.
Question 4
1 / -0

Errors which compensate the effect of each other are called __________ errors.

A
compensating

B
one sided

C
two sided

D
clerical

Solution

Accounting errors are classified as:
1) Error of Principle
2) Error of omission
3) Error of commission
4) Compensating error

Compensating error of those where one error compensate the other error. In this situation, trial balance does not have any difference. For example, Sales of Rs.450 is recorded in the ledger of Ram as Rs.4500, on the other side, Purchases of Rs.450 is recorded in Shyam's account as Rs.4500.
In such situation, a net effect of Rs.4050 is effected both the sides.
Question 5
1 / -0

Trial balance is prepared _________.

A
before balancing the account

B
after balancing the account

C
before ledger posting

D
every month

Solution

Trial balance is prepared after taking the balances of each ledger account. It gives an arithmetical accuracy of books of account if both the sides i.e. debit and credit are agrees.
Basic condition of preparing the trial balance is to have all the ledger accounts balanced. Hence, Trial balance is prepared after balancing the accounts.
Question 6
1 / -0

_________ errors affect agreement of trial balance.

A
Omission in casting

B
Errors of balancing

C
Errors in totalling the trial balance

D
All the three
Solution
Option D is the correct answer.
Below errors affect the agreement of trial balance:

Omission in casting:
Example- Sales daybook is totalled as Rs.4500 while posting in sales ledger instead of Rs.5400.
The error of balancing:
Example-Creditors a/c is wrongly balanced as Rs.3600 instead of Rs.36000.
Errors in totalling the trial balance:
Example- Trial balance is wrongly totalled as Rs.56450 instead of Rs.65450.
Question 7
1 / -0

_________ is a statement of accounts which appeared in the ledger.

A
Trial balance

B
Memorandum of account

C
Balance sheet

D
Journal

Solution

A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts.

Trial Balance is an important statement in the accounting process, which shows final position of all accounts and helps in preparing the final statements.

The task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them in the ledger.
Question 8
1 / -0

Trial balance is prepared to _________.

A
comply with legal requirements

B
comply with accounting standards

C
check arithmetic correctness of books of A/c

D
to ensure true and fair view of books of A/c

Solution

A trial balance is a statement showing the balances or total of debits and credits of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process, which shows the final position of all accounts and helps in preparing the final statements. The task of preparing the statement is simplified because the accountant can take the account balances from the trial balance instead of looking them up into the ledger.
Question 9
1 / -0

Which of the following types of errors do not affect the agreement of trial balance?

A
Omission of an entry altogether from subsidiary books.

B
Errors of principle.

C
Posting an amount on correct side but wrong account.

D
All the three.
Solution
One-sided error always affects the agreement of trial balance.
Whereas errors which are either two-sided error or principle error will not affect the trial balance. In the below cases, the trial balance will always be tallied and does not have any difference:
Omission of an entry altogether from subsidiary books.
For example- sales of Rs.300 to Mr Shyam is omitted to be recorded in books.

The error of principle
For example- the purchase of machinery of Rs.5000 is debited to the purchase account.

Posting of an amount on the correct side but the wrong amount
For example- an amount of Rs.600 credited in Shyam's account instead of Ram's a/c.
Question 10
1 / -0

Which of these is an indicator of arithmetic discrepancies in books of account?

A
Agreement of trial balance.

B
Disagreement of trial balance.

C
Non-balancing of cash book.

D
Non-balancing of personal account.

Solution

Trial balance is prepared by taking the individual ledger balances. If the trial balance agrees, it proves that the books are arithmetically correct. If trial balance is not tallied i.e. debit and credit balances do not agree, that means the books of account are not arithmetically correct.

Disagreement of trial balance is an indicator of arithmetic discrepancies in books of account.

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Trial Balance and Rectification of Errors Test 6

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Trial Balance and Rectification of Errors Test 6

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Question 1

Compensating

Omission

Principle

Commission

Solution

Question 2

Trial Balance

Suspense A/c

Journal

Ledger A/c

Solution

Question 3

Compensating

Omission

Principle

Posting clerical error

Solution

Question 4

compensating

one sided

two sided

clerical

Solution

Question 5

before balancing the account

after balancing the account

before ledger posting

every month

Solution

Question 6

Omission in casting

Errors of balancing

Errors in totalling the trial balance

All the three

Solution

Question 7

Trial balance

Memorandum of account

Balance sheet

Journal

Solution

Question 8

comply with legal requirements

comply with accounting standards

check arithmetic correctness of books of A/c

to ensure true and fair view of books of A/c

Solution

Question 9

Omission of an entry altogether from subsidiary books.

Errors of principle.

Posting an amount on correct side but wrong account.

All the three.

Solution

Question 10

Agreement of trial balance.

Disagreement of trial balance.

Non-balancing of cash book.

Non-balancing of personal account.

Solution

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