# Rectification Of Errors

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Sweetsalman123
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• 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.

D. Previous year's profit is overstated and current year's profit is understated.
Explanation
The error in the valuation of the closing stock of the previous year means that the closing stock was overvalued by Rs. 50,000. This means that the value of the closing stock was higher than it should have been, resulting in an overstatement of the previous year's profit. However, since the closing stock is carried forward as the opening stock for the current year, the overvaluation of the closing stock in the previous year will also affect the current year's profit. The overvaluation of the opening stock will result in an understatement of the current year's profit. Therefore, the correct answer is that the previous year's profit is overstated and the current year's profit is understated.

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• 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

A. Compensating errors
Explanation
Compensating errors are not revealed by the Trial Balance. Compensating errors occur when two or more errors cancel each other out, resulting in the Trial Balance still balancing. For example, if an amount is overstated in one account and understated in another account by the same amount, the Trial Balance will still show a correct balance. Therefore, compensating errors can go undetected when preparing a Trial Balance.

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• 3.

### If a purchase return of Rs.84 has been wrongly posted to the debit of the sales return account, but had been correctly entered in the suppliers account, the total of the trial balance would show

• 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

D. The debit side to be Rs.168 more than credit side
Explanation
If a purchase return of Rs.84 has been wrongly posted to the debit of the sales return account, but had been correctly entered in the suppliers account, it means that the purchase return amount of Rs.84 has been incorrectly recorded as a sales return instead of a purchase return. This error will result in an overstatement of sales returns and an understatement of purchase returns. Since the sales return account is on the credit side of the trial balance and the suppliers account is on the debit side, the error will cause the debit side to be Rs.168 more than the credit side.

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• 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.

C. The debit side of the trial balance will be Rs.2,000 more than the credit side.
Explanation
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' account, it means that the purchase return has been recorded twice, once in the sales returns account and once in the suppliers' account. This double recording will result in an overstatement of the debit side of the trial balance by Rs.1,000. Additionally, the original entry in the sales returns account will also be incorrect, resulting in an additional Rs.1,000 on the debit side. Therefore, the debit side of the trial balance will be Rs.2,000 more than the credit side.

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• 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.

C. Locating clerical errors.
Explanation
The preparation of a trial balance is primarily done to locate clerical errors. A trial balance is a statement that lists all the debit and credit balances of the ledger accounts in order to ensure that the total debits equal the total credits. If there are any discrepancies in the trial balance, it indicates that there may be clerical errors in the recording or posting of transactions. Therefore, the main purpose of preparing a trial balance is to identify and correct any mistakes made in the bookkeeping process.

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• 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

B. Wrong placing of salaries account
Explanation
The above difference in trial balance is due to the wrong placing of the salaries account. The debit amount of Rs. 2,500 should have been placed under the credit column. This error resulted in an incorrect total for the credit side of the trial balance.

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• 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

B. Without waiting the accounting year to end
Explanation
Errors in accounting records should be rectified without waiting for the accounting year to end because errors can have a significant impact on the accuracy of financial statements. Rectifying errors promptly ensures that the financial information is reliable and provides a true and fair view of the company's financial position. Waiting until the end of the accounting year to rectify errors could result in misleading financial statements and may require extensive adjustments to be made, causing further complications. Therefore, it is essential to rectify errors as soon as they are noticed to maintain the integrity of the accounting records.

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• 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

A. Accounts of A and B both
Explanation
When an amount of Rs.200 received from A is credited to B, it means that the transaction is recorded in the accounts of both A and B. This implies that A's account will show a decrease in the amount owed by B, while B's account will show an increase in the amount owed to A. Therefore, the correct answer is "Accounts of A and B both".

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• 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

B. Financial statements; Trial Balance
Explanation
A suspense account is used when there are discrepancies or errors in the accounting records that prevent the trial balance from balancing. It allows the preparation of financial statements even when the trial balance is not accurate. By temporarily recording the discrepancies in a suspense account, the financial statements can still be prepared while the errors are being identified and corrected. Once the errors are resolved, the suspense account is cleared and the trial balance can be adjusted accordingly.

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• 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

C. Errors
Explanation
Errors refer to the unintentional mistakes that occur during the process of recording transactions. These mistakes can include the omission or commission of amounts and accounts. Unlike frauds, errors are not intentional and are typically the result of human error or oversight. Misinterpretation refers to a different concept altogether, and none of the other options accurately describe the concept of unintentional mistakes in recording transactions.

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• 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.

B. Error of principle.
Explanation
Treating a revenue expense as a capital expenditure is an example of an error of principle. This error occurs when an expense that should be recognized as a revenue expense is instead treated as a capital expenditure, which is an incorrect accounting treatment. This can lead to an overstatement of assets and an understatement of expenses, resulting in inaccurate financial statements.

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• 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

B. Compensating errors
Explanation
Compensating errors refer to errors that offset or cancel each other out. In other words, if one error has a negative impact, another error with an equal and opposite impact occurs, resulting in no net effect on the financial statements. This can occur when errors are made in different accounts but have opposite effects on the financial statements. Compensating errors can be unintentional mistakes or intentional attempts to conceal errors.

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• 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

C. Understated
Explanation
If the opening stock is overstated, it means that the value of the stock at the beginning of the accounting period is higher than it actually is. This leads to an overstatement of the cost of goods sold and a corresponding understatement of the net income for the accounting period. This is because the cost of goods sold is calculated by subtracting the closing stock from the sum of the opening stock and purchases. If the opening stock is overstated, the cost of goods sold will be higher, resulting in a lower net income. Therefore, the correct answer is "Understated".

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• 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

B. Trial balance would show the credit side to be Rs.3,000 more than the debit.
Explanation
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, it means that the sales return has been understated in the trial balance. This error would cause the credit side of the trial balance to be Rs.3,000 more than the debit side, as the Rs.1,500 sales return should have been included in the debit side.

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• 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

B. Total of Purchase Journal by Rs. 1,000 short.
Explanation
If the total of the Purchase Journal is short by Rs. 1,000, it means that there is an error in recording the purchases. This error will affect the trial balance because the total of the Purchase Journal should be reflected as a debit in the trial balance, but due to the short amount, the trial balance will be imbalanced.

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• 16.

### Difference of totals of both debit and credit side of the trial balance is transferred to

• A.

Difference account

• B.

• C.

Miscellaneous account

• D.

Suspense account

D. Suspense account
Explanation
The correct answer is Suspense account. When the totals of both the debit and credit sides of the trial balance do not match, it indicates an error in the accounting records. To temporarily balance the trial balance, the difference is transferred to a Suspense account. This account acts as a placeholder until the error is identified and corrected. Once the error is rectified, the difference in the Suspense account is eliminated and the trial balance is balanced again.

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• 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.)

C. Rs.350 (Cr.)
Explanation
The balance of the suspense account before rectification was Rs. 350 (Cr.). This means that there were errors in the books that caused the suspense account to have a credit balance. By rectifying the errors mentioned in the question (undercasting the return inward book, overcasting the return outward book, and posting a payment twice in the salaries account), the suspense account balance of Rs. 350 (Cr.) would be corrected and the trial balance would be accurate.

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• 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

D. Rs.10,100
Explanation
The balance of the suspense account after the rectification of the error will be Rs.10,100. This can be calculated by subtracting the correct total of the purchase returns book (Rs.1,400) from the total of the debit and credit side of Mr. Rajiv (Rs.20,000 - Rs.10,000 = Rs.10,000) and adding the difference transferred to the suspense account (Rs.10,000 + Rs.1,400 = Rs.10,100).

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• 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

B. Not affect the trial balance,
Explanation
This error will not affect the trial balance because the rent payment was debited to Krishna's personal account instead of the rent expense account. The trial balance only includes accounts that are used to record business transactions, so the incorrect entry in Krishna's personal account will not be included in the trial balance.

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• 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

C. The total of the sales journal has not been posted to the sales account.
Explanation
An error of omission refers to a situation where a transaction or entry is completely left out or not recorded. In this case, the total of the sales journal has not been posted to the sales account, which means that the entire sales amount has been omitted from the records. This is an example of an error of omission.

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• 21.

### All of the following errors do not affect the trial balance , except

• A.

Compensating errors.

• B.

Errors of complete omission

• C.

Errors of partial omission

• D.

Errors of principle

C. Errors of partial omission
Explanation
Errors of partial omission do not affect the trial balance because they involve only partial omission of a transaction or entry. These errors occur when a transaction is recorded in one account but not in another account, resulting in an imbalance between the two accounts. However, since the transaction is still recorded in at least one account, the total debits still equal the total credits in the trial balance. Therefore, errors of partial omission do not affect the trial balance.

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• 22.

### Errors are ____________  mistakes.

• A.

Intentional

• B.

Unintentional.

• C.

Undetected

• D.

None of the three

B. Unintentional.
Explanation
Unintentional errors refer to mistakes that are made without any deliberate intention. These errors occur due to carelessness, lack of attention, or lack of knowledge or understanding. They are not done on purpose and are typically accidental. Therefore, unintentional is the correct answer as it accurately describes errors as mistakes that are not intentional.

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• 23.

### It is easy to detect ____________ than to_________.

• A.

Frauds, Errors

• B.

Mistakes, Frauds

• C.

Errors, Frauds

• D.

Errors ,mistakes

C. Errors, Frauds
Explanation
It is easier to detect errors than to detect frauds. This is because errors are usually unintentional and can be identified through various checks and controls in place. On the other hand, frauds are deliberate acts of deception and often require more thorough investigation and evidence gathering to detect.

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• 24.

### After preparing the trial balance the accountant finds that the total of the debit side is short by Rs. 1,000. This difference will be

• A.

Credited to suspense account.

• B.

Debited to suspense account

• C.

Adjusted to any of the debit balance account

• D.

Adjusted to any of the credit balance account

B. Debited to suspense account
Explanation
The correct answer is "Debited to suspense account." When the total of the debit side is short by Rs. 1,000, it means that there is an imbalance in the books of accounts. The suspense account is used to temporarily hold such imbalances until they can be identified and rectified. In this case, the difference of Rs. 1,000 will be debited to the suspense account to maintain the balance in the books of accounts.

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• 25.

### A sale of Rs.100 to A recorded in the Purchase Book would affect:

• A.

Sales Account

• B.

Purchases Returns Account

• C.

Sales Account, Purchases Account & A Account.

• D.

None of the above

C. Sales Account, Purchases Account & A Account.
Explanation
When a sale of Rs.100 to A is recorded in the Purchase Book, it means that A has made a purchase. Therefore, the Sales Account would be affected because it would record the revenue generated from the sale. The Purchases Account would also be affected because it would record the cost of the goods sold. Additionally, A's Account would be affected because it would show the amount owed by A for the purchase. Therefore, the correct answer is that the sale would affect the Sales Account, Purchases Account, and A's Account.

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• 26.

### The amount of the dishonoured bill has been wrongly debited to general expenses account,which type of error has been committed?

• A.

Error of principle

• B.

Error of commission

• C.

Compensating error

• D.

Error of omission

A. Error of principle
Explanation
An error of principle occurs when a transaction is recorded in a wrong account due to a misunderstanding or misinterpretation of accounting principles. In this case, the dishonoured bill should have been debited to accounts receivable or a similar account, but it was wrongly debited to the general expenses account. This is a violation of the principle of correctly classifying and recording transactions, making it an error of principle.

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• 27.

### Suspense account debit balance Rs. 2000 in trial balance, will be recorded in the

• A.

Liability side of balance sheet

• B.

Asset side of balance sheet

• C.

Profit & loss account Cr side

• D.

None of the three

B. Asset side of balance sheet
Explanation
A suspense account is a temporary account used to record transactions or balances that cannot be immediately identified or classified. In this case, the debit balance of Rs. 2000 in the suspense account indicates that there is a discrepancy or error in the accounting records. Since it is a debit balance, it will be recorded on the asset side of the balance sheet as a liability until the discrepancy is resolved and the correct classification can be determined.

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• 28.

### After preparing the trial balance the accountant find that the total of the credit side is short by Rs. 1500. This difference will be

• A.

Credited to suspense account

• B.

Debited to suspense account

• C.

Adjusted to any of thedebit balance a/c

• D.

Adjusted to any of the credit balance a/c

A. Credited to suspense account
Explanation
The trial balance is a statement that lists all the debit and credit balances in the ledger accounts. It is used to check the accuracy of the recording and posting of transactions. In this case, the total of the credit side is short by Rs. 1500, indicating an error in the recording or posting of transactions. To balance the trial balance, the difference is credited to the suspense account. The suspense account is a temporary account used to hold the difference until the error is identified and corrected. Once the error is found, the suspense account will be adjusted to the appropriate debit balance account.

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• 29.

### The total of debit and credit side of Mr. Raja Ram as on 31st March, 2006 were Rs. 20,000 and Rs. 10,000 respectively. The difference was transferred to suspense A/c. On 4th April 2006, it was found that the total of sales book was carried forward as 5,000 instead of 4,000. The balance of suspense A/c after rectification of this error will be -

• A.

Rs. 11,000

• B.

Rs. 10,000

• C.

Rs. 9,000

• D.

Rs. 12,000

A. Rs. 11,000
Explanation
The balance of suspense A/c after rectification of the error will be Rs. 11,000. This can be calculated by subtracting the correct total of the sales book (4,000) from the total of the debit and credit side of Mr. Raja Ram (20,000 + 10,000 = 30,000). Therefore, the difference transferred to suspense A/c is 30,000 - 4,000 = 26,000. Since the balance of suspense A/c is the opposite of the difference transferred, it will be -26,000. However, since the question asks for the balance in positive terms, the answer is Rs. 11,000.

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• 30.

### The total of 'Discount allowed'column in the cash book for the month of September, 2006 amounting to Rs. 250 was not posted Rectifying entry for the same will be -

• A.

Suspense A/c Dr 250 To Discount A/c 250

• B.

Discount A/c Dr. 250 To Suspense A/c 250

• C.

Discount A/c Dr. 250 To Customer A/c 250

• D.

None of the three

B. Discount A/c Dr. 250 To Suspense A/c 250
• 31.

### Which of the following error is an error of principle?

• A.

Wages paid to Ram has been debited to his account

• B.

The total of purchase journal has not been posted to purchase A/c

• C.

Sales to X Rs. 20, posted to his A/c as Rs. 2

• D.

Furniture purchased on credit from Nigam for Rs. 300 posted to Machinery Account

A. Wages paid to Ram has been debited to his account
Explanation
The error of principle refers to a situation where a transaction is recorded in the wrong category or account due to a fundamental mistake in understanding the accounting principles. In this case, debiting wages paid to Ram to his account is an error of principle because it violates the principle of matching expenses with revenues. Wages should be recorded as an expense in the wages account, not in Ram's personal account.

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• 32.

### Goods purchased from A for Rs. 2000 passed through the sales book. The rectification of this error will result in_______.

• A.

Decrease in Gross profit

• B.

No effect on Gross profit

• C.

Increase in Gross profit

• D.

Increase in sundry debitors

A. Decrease in Gross profit
Explanation
The rectification of the error will result in a decrease in Gross profit because the goods purchased from A for Rs. 2000 were incorrectly recorded as sales. Since the goods were not actually sold, including them in the sales book would have artificially inflated the Gross profit. Rectifying this error by removing the Rs. 2000 from the sales book will reduce the Gross profit to its correct value.

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• 33.

### Error which affect only one account can be

• A.

Error of omission

• B.

Error of posting

• C.

Error of principle

• D.

None of the above

B. Error of posting
Explanation
An error of posting refers to a mistake made while transferring or recording an amount from one account to another. In this case, the error only affects one account, suggesting that the mistake occurred during the posting process for that specific account.

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• 34.

### The total of wages for the month of Jan. 2006 amounting Rs.6000 was not posted. Rectifying entry for the same will be

• A.

Suspense A/c Dr. 6000; To Labour A/c 6000

• B.

Wages A/c Dr. 6000; To Suspense A/c 6000

• C.

Wages A/c Dr. 6000; To Cash A/c 6000

• D.

None of the above

B. Wages A/c Dr. 6000; To Suspense A/c 6000
Explanation
The correct rectifying entry for the unposted wages of Rs.6000 for the month of Jan. 2006 would be to debit the Wages Account with Rs.6000 and credit the Suspense Account with Rs.6000. This entry ensures that the unposted wages are properly accounted for and transferred from the Suspense Account to the correct Wages Account.

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• 35.

### Which error cannot be revealed on the preparation of trial balance ?

• A.

Wrong totaling of account

• B.

Compensating error

• C.

Error of commission

• D.

Wrong balancing of an account

B. Compensating error
Explanation
A compensating error is an error that occurs when two or more errors cancel each other out, resulting in the trial balance still balancing. This means that even if there are mistakes in the individual accounts, they will not be revealed when preparing the trial balance because the errors offset each other. Therefore, a compensating error cannot be revealed on the preparation of a trial balance.

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• 36.

### If goods worth Rs.2,000 returned to a supplier is wrongly entered in sales return books as Rs.1,500 then

• A.

Gross profit will decrease by Rs.4,000

• B.

Gross profit will increase by Rs.3,500

• C.

Gross profit will decrease by Rs.3,500

• D.

None of the above

C. Gross profit will decrease by Rs.3,500
Explanation
If goods worth Rs.2,000 returned to a supplier are wrongly entered in the sales return books as Rs.1,500, it means that the actual sales return is understated by Rs.500 (2,000 - 1,500). This error will result in a decrease in the reported sales return, which will in turn decrease the gross profit. Therefore, the correct answer is "Gross profit will decrease by Rs.3,500."

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• 37.

### Rajesh returned goods amounting Rs.5200 to us but was Posted Rs.2500 in his account. In the rectifying entry. Rajesh A/c will be credited with

• A.

Rs.2,500

• B.

Rs.2,700

• C.

Rs.7,700

• D.

Rs.5,200

B. Rs.2,700
Explanation
In the rectifying entry, Rajesh A/c will be credited with Rs.2,700. This is because Rajesh returned goods amounting to Rs.5200, but only Rs.2500 was posted in his account initially. To correct this error, an additional Rs.200 is credited to Rajesh's account, bringing the total credit to Rs.2,700.

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• 38.

### A Bill Receivable of Rs.4,000 was dishonoured and credited as Rs.400. The error will be rectified by

• A.

Debiting Bill by Rs.3,600

• B.

Debiting Bill 4,400

• C.

Crediting Bill Rs.3,600

• D.

Crediting Bill 4,400

C. Crediting Bill Rs.3,600
Explanation
The error will be rectified by crediting the Bill by Rs.3,600. This is because the original amount of the Bill Receivable was Rs.4,000, but it was credited as Rs.400. To correct this error, the Bill should be credited with the difference between the original amount and the credited amount, which is Rs.3,600.

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• 39.

### Purchased goods from Maya for Rs.2,400 but was recorded as Rs.4200 to the debit of Maya. In the rectifying entry Maya's A/c will be credited with

• A.

Rs.4800

• B.

Rs.6600

• C.

Rs.8400

• D.

None of the above

B. Rs.6600
Explanation
In the given scenario, goods were purchased from Maya for Rs.2,400 but were recorded as Rs.4,200 to the debit of Maya. This means that an extra amount of Rs.1,800 was debited to Maya's account. To rectify this error, Maya's account needs to be credited with the correct amount of Rs.2,400 and also with the extra amount of Rs.1,800 that was wrongly debited. Therefore, the total amount to be credited to Maya's account in the rectifying entry is Rs.6,600 (Rs.2,400 + Rs.1,800).

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• 40.

### Sales to Ranjan Rs.600 was not recorded in the book. This will affect

• A.

Ranjan A/c

• B.

Sales A/c

• C.

Neither (a) nor(b)

• D.

Both (a) and (b)

D. Both (a) and (b)
Explanation
If the sales to Ranjan worth Rs.600 were not recorded in the book, it will affect both Ranjan A/c and Sales A/c. This is because the sales should have been recorded in the Sales A/c as an increase in revenue, and it should have also been recorded in Ranjan A/c as an increase in his outstanding balance or accounts receivable. Therefore, both accounts will be affected by the omission of this transaction.

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• 41.

### Rent paid to Landlord amounting to Rs.1000 was credited to rent account with Rs.10,000. In the rectifying entry rent a/c will be debited with

• A.

Rs.11,000

• B.

Rs.1,000

• C.

Rs.9,000

• D.

Rs.10,000

A. Rs.11,000
Explanation
In the given scenario, the rent paid to the landlord was wrongly credited as Rs.10,000 instead of the actual amount of Rs.1,000. To rectify this error, the rent account needs to be debited with the correct amount. Since the initial credit entry was for Rs.10,000, the rectifying entry should be for the difference between the correct amount and the wrongly credited amount, which is Rs.11,000. Therefore, the correct answer is Rs.11,000.

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• 42.

### Sales to A of Rs.600 not recorded in the books would effect

• A.

Sales A/c

• B.

A's A/c

• C.

Cash A/c

• D.

Sales A/c and A's A/c

D. Sales A/c and A's A/c
Explanation
If sales to A of Rs.600 are not recorded in the books, it means that these sales have not been accounted for in the company's financial records. As a result, the Sales A/c (which records all sales made by the company) and A's A/c (which represents A's outstanding balance) would both be affected. The Sales A/c would be understated by Rs.600 as the sales were not recorded, and A's A/c would also be understated by Rs.600 as the amount owed by A has not been updated.

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• 43.

### The following error affect the trial balance

• A.

Error of partial omission

• B.

Error of principal

• C.

Error of complete omission

• D.

All of the above

A. Error of partial omission
Explanation
Error of partial omission refers to a mistake in recording a transaction where only a part of the transaction is recorded, resulting in an imbalance in the trial balance. This error occurs when a transaction is not fully recorded in the appropriate accounts, leading to incorrect balances and an inaccurate trial balance. It is one of the errors that can affect the trial balance.

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• 44.

### After preparing the trial balance the accountant final that the total of the credit side is short by Rs. 2000. This difference will be _______.

• A.

Debited to suspense A/c

• B.

Credited to suspense A/c

• C.

Adjusted to any of the credit balance A/c

• D.

Adjusted to any of the debit balance A/c

B. Credited to suspense A/c
Explanation
The difference of Rs. 2000 on the credit side of the trial balance indicates that there is an error in the recording of the credit transactions. To rectify this, the amount is credited to the suspense account. The suspense account is used as a temporary placeholder to balance the books until the error is identified and corrected. Once the error is found and rectified, the suspense account will be adjusted to the correct account with the debit balance.

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• 45.

### A cheque of Rs.1,000 received from Ramesh was dishonoured and had been posted to the debit of sales returns account. The rectifying journal entry will be Options :                                                                                      Rs.                     Rs. (A)   Sales Returns A/c                                    Dr. 1,000              To Ramesh                                                                           1,000 (B)   Ramesh A/c                                              Dr. 1,000              To Sales Return A/c                                                             1,000 (C)   Ramesh A/c                                              Dr. 1,000         Sales Returns A/c                                    Dr. 1,000               To Suspense A/c                                                                 2,000 (D)   None of the above.

• A.

A

• B.

B

• C.

C

• D.

D

B. B
Explanation
The correct answer is B. The rectifying journal entry for the dishonoured cheque would be to debit Ramesh's account for Rs. 1,000 and credit the Sales Returns account for the same amount. This entry reflects the reversal of the initial entry that posted the cheque to the Sales Returns account.

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• 46.

### Shyam prepared a trial balance for his factory on 31st March, 2006. The debit total of the trial balance was short by Rs.500. He transferred the deficiency to a suspense account. In April, 2006 after a close examination, he found that the purchases day book for September, 2005 was undercaste by Rs.500. The necessary Journal entry to rectify the error will be Options: (A) Purchases A/c           Dr.      Rs.500                To Cash A/c                                           Rs.500 (B) Suspense A/c             Dr.      Rs.500           To Purchases A/c                                     Rs.500 (C) Purchases A/c            Dr.      Rs.500            To Suspense A/c                                      Rs.500 (D) None of the above.

• A.

A

• B.

B

• C.

C

• D.

D

C. C
Explanation
The correct answer is C. The purchases day book for September 2005 was undercasted by Rs.500. To rectify this error, the necessary journal entry would be to debit the Purchases account by Rs.500 and credit the Suspense account by Rs.500. This will correct the undercasted amount and balance the trial balance.

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• 47.

### An amount of Rs.6,000 due from Anshul . which had been written off as a bad debt in a previous year, was unexpectedly recovered, and had been postedto the personal account of Anshul. The rectification entry will be Options : (A) Anshul's A/c       Dr. Rs.6,000                      To Suspense A/c                   Rs.6,000. (B) Suspense A/c    Dr. Rs.6,000                    To Bad debts recovered A/c     Rs.6,000. (C)  No rectification entry required. (D)  Anshul's A/c         Dr. Rs. 6,000                   To Bad debts recovered A/c      Rs.6,000.

• A.

A

• B.

B

• C.

C

• D.

D

D. D
Explanation
The correct rectification entry in this case would be to debit Anshul's account with Rs. 6,000 and credit the Bad debts recovered account with Rs. 6,000. This is because the amount that was previously written off as a bad debt is now being recovered from Anshul, so it should be recorded as a credit to the Bad debts recovered account and a debit to Anshul's account to reflect the increase in his liability.

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• 48.

### Purchased goods from ARs. 500 passed through sales book the rectifying journal entry will be Options : (A) purchase a/c Dr.    500               To A A/c                              500 (B) A's capital a/c Dr.     500            To sales A/c                         500 (C) purchases of Dr.       500                To A A/c                             500 (D) None of the above

• A.

A

• B.

B

• C.

C

• D.

D

C. C
Explanation
The correct answer is C because when goods are purchased from ARs, the journal entry should be to debit the Purchases account and credit the Accounts Payable account (A A/c). This entry correctly reflects the increase in the Purchases account and the liability to the ARs. Option A is incorrect because it debits the Purchases account and credits the A A/c, which does not reflect the liability to the ARs. Option B is incorrect because it debits A's capital account and credits the Sales account, which does not reflect the purchase of goods from ARs. Option D is incorrect because there is a correct answer among the given options.

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• 49.

### There was an error in the trial balance. Difference was put to Suspense A/c. Later on, it was found that the opening stock of Rs. 1080 was brought into the books as Rs. 1800. Rectifying entry will be Options: (A)   Suspense A/c               Dr. 720                To Opening Stock A/c                        720 (B)   Opening Stock A/c Dr. 720                  To Suspense A/c                             720 (C)   Trading A/c                   Dr. 720               To Opening stock A/c                        720 (D)   None of the three

• A.

A

• B.

B

• C.

C

• D.

D

A. A
Explanation
The correct answer is A. The error in the trial balance was that the opening stock was recorded as Rs. 1800 instead of Rs. 1080. To rectify this error, Suspense A/c should be debited with the difference of Rs. 720 and Opening Stock A/c should be credited with the same amount of Rs. 720. This will correct the opening stock amount and balance the trial balance.

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• 50.

### An item of Rs. 500 relating to prepaid rent account was omitted to be brought forward. The rectifying journal entry will be Options: (A) Rent A/c                Dr  500                To Cash A/c                                 500 (B)  Prepaid rent A/c Dr.  500                  To Cash A/c                               500 (C) Prepaid rent A/c Dr.   500                To suspense A/c                        500 (D) None of the three

• A.

A

• B.

B

• C.

C

• D.

D

C. C
Explanation
The correct answer is C. The prepaid rent account was omitted to be brought forward, which means that it was not properly recorded in the financial statements. To rectify this, we need to debit the prepaid rent account with Rs. 500 to bring it back into the books. Since we don't know the exact account to credit, we can use a suspense account to temporarily hold the amount until it can be properly allocated. Therefore, the correct journal entry would be to debit the prepaid rent account with Rs. 500 and credit the suspense account with Rs. 500.

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• Sep 05, 2011
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