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Trial Balance and Rectification of Errors Test 7

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Trial Balance and Rectification of Errors Test 7
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Which of the following is an error of principle?
    Solution
    While doing the accounting, if the basic rule of accounting is not followed, there is an error of principle.
    For example, the purchase of machinery is debited to purchases account. Its an error of principle as capital expenditure is debited as revenue expenditure. This will affect the profitability of the business. 
  • Question 2
    1 / -0
    Rs. 510 paid on carriage of office equipment was debited to sundry expenses a/c. On rectification account will be credited_________.
    Solution
    As sundry expenses account is wrongly debited therefore, to rectify it shall be credited.
  • Question 3
    1 / -0
    Which of these is an indicator of non-arithmetic discrepancies in books of account?
    Solution
    Option A is correct.
    Trial balance is prepared by taking the individual ledger balances. If the trial balance agrees, it proves that the books of arithmetical correct. If trial balance is not tallied i.e. debit and credit does not agrees, that means the books of account are not arithmetically correct. 

    Agreement of trial balance is an indicator that books of account are arithmetically correct but there are chances of non arithmetic discrepancies in books of account.
  • Question 4
    1 / -0
    When a transaction has been omitted to be recorded in the books of account completely or partially, the mistake or error is called error of __________.
    Solution
    The errors of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger. There can be two types:
    (i) error of complete omission
    (ii) error of partial omission
    When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. When the recording of transaction is partly omitted from the books, it is an error of partial omission.
  • Question 5
    1 / -0
    If an amount is posted in the wrong account/wrong side/wrong amount/wrong total the resultant error is called error of _______.
    Solution
    Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. For example, Raj Hans Traders paid Rs. 25,000 to Preetpal Traders (a supplier of goods). This transaction was correctly recorded in the cashbook. But while posting in the ledger, Preetpal's account was debited with Rs. 2,500 only. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
  • Question 6
    1 / -0
    Rs. 4,000 received from Shyam credited to Shyam Associates A/c is an example of error of _________.
    Solution
    Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, the wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. For example Rs. 4,000 received from Shyam credited to Shyam Associates A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission effect in the trial balance.
  • Question 7
    1 / -0
    Rs.75,000 received from Mrs Sharma however this transaction was not recorded in cash journal. This is an error of_________.
    Solution
    The errors of omission may be committed at the time of recording the transaction in the books of original entry or while posting to the ledger. They are of two types:
    (i) error of complete omission
    (ii) error of partial omission
    When a transaction is completely omitted from recording in the books of original record, it is an error of complete omission. For example, Rs. 75,000 received from Mrs. Sharma is not recorded in cash journal, is an error of complete omission.
  • Question 8
    1 / -0
    Rs.5,100 paid to Sonu as salary for the month of December 2008 was debited to his A/c. This is an error of ________.
    Solution
    Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiary books, or wrong recording of the amount in the books of original entry, etc. Rs. 5,100 paid to Sonu as salary for the month of December 2008 wad debited to his A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
  • Question 9
    1 / -0
    Transactions recorded in contravention of accounting principles results into errors of ________________.
    Solution
    Accounting entries are recorded as per the generally accepted accounting principles. If any of these principles are violated or ignored, errors resulting from such violations are known as errors of principle. An error of principle may occur due to incorrect classification of expenditure or receipt between capital and revenue. This is very important because it will have an impact on financial statements. It may lead to under/overstating of income or assets or liabilities, etc. For example, the amount spent on additions to the buildings should be treated as capital expenditure and must be debited to the asset account. Instead, if this amount is debited to the maintenance and repairs account, it has been treated as a revenue expense. This is an error of principle. Transactions recorded in contravention of accounting principles result in error of principles.
  • Question 10
    1 / -0
    Rs. 5,100 received from Mohan but credited to Sohan A/c.This is an error of ________.
    Solution
    Errors of commission are the errors that are committed due to wrong posting of transactions, wrong totaling or balancing of the accounts, wrong casting of the subsidiarity books, or wrong recording of the amount in the books of original entry. For example, Rs. 5,100 received from Mohan but credited to Sohan's A/c. This constitutes an error of commission. Such an error by definition is of clerical nature and most of the errors of commission affect the trial balance.
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