Rectification Of Errors

20 Questions | Total Attempts: 598

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Management Quizzes & Trivia

Questions and Answers
  • 1. 
    While finalizing the current year's profit, the company realized that there was an error in the valuation of closing stock of the previous year. In the previous year, closing stock was valued more by Rs.50,000. As a result
    • A. 

      Previous year's profit is overstated and current year's profit is also overstated.

    • B. 

      Previous year's profit is understated and current year's profit is overstated.

    • C. 

      Previous year's profit is understated and current year's profit is also understated.

    • D. 

      Previous year's profit is overstated and current year's profit is understated.

  • 2. 
    Which of the following errors are not revealed by the Trial Balance:
    • A. 

      Compensating errors

    • B. 

      Errors of commission

    • C. 

      Wrong balancing of an account

    • D. 

      Wrong totalling of an account

  • 3. 
    • A. 

      The credit side to be Rs.84 more than debit side

    • B. 

      The debit side to be Rs.84 more than credit side

    • C. 

      The credit side to be Rs,168 more than debit side

    • D. 

      The debit side to be Rs.168 more than credit side

  • 4. 
    If a purchase return of Rs.1,000 has been wrongly posted to the debit of the sales returns account, but has been correctly entered in the suppliers' acpount, the total of the
    • A. 

      Trial balance would show the debit side to be Rs. 1,000 more than the credit

    • B. 

      Trial balance would show the credit side to be Rs.1,000 more than the debit

    • C. 

      The debit side of the trial balance will be Rs.2,000 more than the credit side.

    • D. 

      The credit side of the trial balance will be Rs.2,000 more than the debit side.

  • 5. 
    The preparation of a trial balance is for:
    • A. 

      Locating errors of complete omission.

    • B. 

      Locating errors of principle.

    • C. 

      Locating clerical errors.

    • D. 

      All of the above.

  • 6. 
    The accountant of the firm M/s ABC is unable to tally the following trial balance S. No. Account heads         Debit (Rs.)         Credit(Rs.)           1.   Sales                                                                  15,000 2.   Purchases                          10,000                         3.   Miscellaneous expenses   2,500 4.   Salaries                                                               2,500 Total                                                 12,500             17,500 The above difference in 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

  • 7. 
    Whenever errors are noticed in the accounting records, they should be rectified
    • A. 

      At the time of preparation of the trial balance

    • B. 

      Without waiting the accounting year to end

    • C. 

      After the preparation of final accounts

    • D. 

      In the next accounting year

  • 8. 
    An amount of Rs.200 received from A credited to B would affect           
    • A. 

      Accounts of A and B both

    • B. 

      A's account only

    • C. 

      Cash account

    • D. 

      B's account onlv

  • 9. 
    A suspense account facilitates the preparation of________________ even when the  __________has not tallied
    • A. 

      Ledgers; Trial balance

    • B. 

      Financial statements; Trial Balance

    • C. 

      Trial balance; Financial statements.

    • D. 

      Journal; Trial balance

  • 10. 
    Unintentional omission or commission of amounts and accounts in the process of recording transactions are known as
    • A. 

      Frauds

    • B. 

      Misinterpretation.

    • C. 

      Errors

    • D. 

      None of the above

  • 11. 
    "Treating a revenue expense as a capital expenditure" is an example of
    • A. 

      Compensating errors.

    • B. 

      Error of principle.

    • C. 

      Error of omission.

    • D. 

      Error of commission.

  • 12. 
    If an effect of an error is cancelled by the effect of some other error, it is 11 commonly known as     
    • A. 

      Errors of principle

    • B. 

      Compensating errors

    • C. 

      Errors of omission.

    • D. 

      Errors of commission

  • 13. 
    When opening stock is overstated, net income for the accounting period will be        
    • A. 

      Overstated

    • B. 

      Not be affected

    • C. 

      Understated

    • D. 

      None of the above

  • 14. 
    If a sales return of Rs.1,500 has been wrongly posted to the credit of the purchase returns account, but has been correctly entered in the debtors' account, the total of the     
    • A. 

      Trial balance would show the debit side to be Rs.3,000 more than the credit

    • B. 

      Trial balance would show the credit side to be Rs.3,000 more than the debit.

    • C. 

      The debit side of the trial balance will be Rs. 1,500 more than the credit side.

    • D. 

      The credit side of the trial balance will be Rs. 1,500 more than the debit side

  • 15. 
    Which of the following errors will affect the trial balance?    
    • A. 

      Repairs to building wrongly debited to Building A/c

    • B. 

      Total of Purchase Journal by Rs. 1,000 short.

    • C. 

      Freight paid on new machinery debited to Freight A/c

    • D. 

      None of the three

  • 16. 
    Difference of totals of both debit and credit side of the trial balance is transferred to
    • A. 

      Difference account

    • B. 

      Trading account

    • C. 

      Miscellaneous account

    • D. 

      Suspense account

  • 17. 
    Following errors have been rectified at the end of the year: (i)  The return inward book was undercast by Rs. 150. (ii)  The return outward book was overcast by Rs. 1,000. (iii)  A payment of Rs.1,500 on account of salaries has been posted twice in the salaries account although entered correctly in the cashbook. The above errors if rectified, will give correct trial balance. Before rectification, balance of suspense account was
    • A. 

      Rs. 150 (Dr.)

    • B. 

      Rs. 1,150 (Dr.)

    • C. 

      Rs.350 (Cr.)

    • D. 

      Rs. 1,500 (Cr.)

  • 18. 
    The total of the debit and credit side of Mr. Rajiv as on 31st March, 2006 were Rs.20,000 and Rs.10,000 respectively. The difference was transferred to suspense account. On 4th April, 2006, it was found that the total of purchase returns book was carry forward as Rs.1,500 instead of Rs.1,400. The balanceof the suspense account after the rectification of this error will be: 
    • A. 

      Rs.10,000

    • B. 

      Rs. 9,900

    • C. 

      Rs.11,500

    • D. 

      Rs.10,100

  • 19. 
    Rs. 1,000 paid as rent to Krishna, the landlord, was debited to Krishan's  personal account. This error will  
    • A. 

      Affect the trial balance.

    • B. 

      Not affect the trial balance,

    • C. 

      Affect the suspense account.

    • D. 

      None of the three

  • 20. 
    Which of the following errors is an error of omission?  
    • A. 

      Sale of Rs. 5,000 was written in the purchases journal.

    • B. 

      Wages paid to Shyam has been debited to his account.

    • C. 

      The total of the sales journal has not been posted to the sales account.

    • D. 

      None of the above