Chapter 6-Trial Balance and Rectification of Errors
Important MCQ questions for Class 11 Accountancy Chapter 6-Trial Balance and Rectification of Errors
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MCQ Questions for Chapter 6-Trial Balance and Rectification of Errors class 11 Accountancy (Questions set-1)
Accounting - MCQ on Trial Balance, Errors And Their Rectification
Class XI
Q.1 Statement which shows the balances of all the accounts in ledger is known as
a. journal.
b. ledger.
c. trial balance.
d. balance sheet.
Answer:
(b) Trial Balance
Explanation- 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.
Q.2 Money deposited into a Bank is recorded in the following column of Three-column Cash book-
a. bank column.
b. cash column.
c. discount column.
d. date column.
Answer:
(a) Bank Column
Explanation- Money deposited into a Bank is recorded in the Bank Column of a Three-Column Cash Book on the debit side while withdrawals are recorded on the credit side.
Q.3 If the balancing of an account is incorrect then the following would not tally-
a. journal.
b. trial balance.
c. balance sheet.
d. ledger.
Answer:
(b) Trial balance
Explanation- Trial balance will not tally if the balancing of an account is incorrect.
Q.4 Trial Balance is normally prepared
a. in the beginning of the year.
b. in the half-year.
c. in the period of four months.
d. at the end of the year.
Answer:
(d) At the end of the year
Explanation- It is normally prepared at the end of an accounting year. However, an organisation may prepare a trial balance at the end of any chosen period, which may be monthly, quarterly, half yearly or annually depending upon its requirements.
Q.5 To help in locating error is the objective of
a. trial balance.
b. balance sheet.
c. journal.
d. ledger.
Answer:
(a) Trial balance
Explanation- Trial Balance is prepared to fulfil the objective of locating error.
Q.6 Paid cartage for the newly purchased furniture Rs.100, posted to Cartage Account. The rectifying entry will be
a. Cartage A/c .......Dr.
To Furniture A/c.
b. Cartage A/c...............Dr.
To Cash A/c.
c. Furniture A/c.........Dr.
To Cash A/c.
d. Furniture A/c.........Dr.
To Cartage A/c.
Answer:
(d)
Explanation- The rectifying entry will be-
Furniture A/c...................Dr. 50
To Cartage A/c 50
(Cartage paid for newly purchased furniture
wrongly posted to Cartage A/c now rectified)
Q.7 On 31st December 1999 goods of the value of Rs.8,000 were returned by Zaid Ahmed and were taken into stock on the same date but no entry was passed in the books. The rectifying entry will be
a. Returns Outward A/c...............Dr.
To Zaid Ahmed.
b. Returns Inward A/c..............Dr.
To Zaid Ahmed.
c. Zaid Ahmed........................Dr.
To Purchases A/c.
d. Purchases A/c....................Dr.
To Zaid Ahmed.
Answer:
(b)
Explanation- The rectifying entry will be-
Returns Inward A/c.........................Dr. 8,000
To Zaid Ahmed 8,000
(Entry of goods returned
Omitted from records)
Q.8 The basis of preparation of financial statements is
a. trial balance.
b. sales book.
c. purchases book.
d. journal.
Answer:
(a) Trial balance
Explanation- Trial Balance helps in the preparation of financial statements. It facilitates the preparation of financial statements.
Q.9 Number of methods for preparation of Trial balance are-
a. five.
b. four.
c. seven.
d. Two.
Answer:
(c) Two
Explanation- A trial balance can be prepared in the following three ways:
(i) Totals Method
(ii) Balances Method
Q.10 The list of balances of all ledger accounts and cash book is called
a. journal.
b. ledger.
c. balance sheet.
d. trial balance.
Answer:
(d) Trial balance
Explanation- The feature of Trial Balance is that it is a list of all Ledger accounts and Cash Book. Trial balance is a statement and not an account.
Q.11 The prima facie evidence of the arithmetical accuracy of records is called
a. trial balance.
b. ledger.
c. journal.
d. balance sheet.
Answer:
(a) Trial balance
Explanation- A Trial balance essentially proves the arithmetical accuracy of the books of account. If total of both the sides of a Trial Balance are same then it is proved that books are at least arithmetically correct.
Q.12 Goods of the value of Rs.3,000 were returned by Mr. Verma entered in the Sales Day Book and posted there from to the credit of his account. The rectification entry will be
a. Purchase Return A/c...................Dr.
To Suspense A/c.
b. Suspense A/c.......................Dr.
To Sales Return A/c.
c. Sales A/c....................Dr.
Sales return A/c...........Dr.
To Suspense A/c.
d. Sales Return A/c..............Dr.
To Sales A/c
To Suspense A/c.
Answer:
(c)
Explanation- The entry will be-
Sales A/c.......................Dr.
Sales Return A/c..............Dr.
To Suspense A/c
(The value of goods returned by Mr. Verma wrongly posted to sales and omission of debit to Sales Return Account,now rectified)
Q.13 Suppose Rs.500 received by sale of an old machinery and this amount is wrongly posted in sales account instead of machinery account. This error will
a. increase the loss.
b. decrease the profit.
c. decrease the loss.
d. increase the profit.
Answer:
(d)
Explanation- It is because increased amount of sales will be transferred to the credit side of Trading Account. By rectification of this error, the amount will be posted on the debit side of sales account and amount of profit will be reduced.
Q.14 If the debit side total is greater, it is called a
a. debit balance.
b. credit balance.
c. zero balance.
d. negative balance.
Answer:
(a) Debit Balance
Explanation- If the debit side total is greater, it is called a Debit Balance.
Q.15 Preparation of Final Accounts is facilitated by
a. balance sheet.
b. journal.
c. ledger.
d. trial balance.
Answer:
(d) Trial balance
Explanation- Trial balance facilitates the preparation of Final Accounts by making available the balances of all the accounts at one place.
Q.16 Summary of each account is shown by
a. journal.
b. trial balance.
c. ledger.
d. balance sheet.
Answer:
(b) Trial Balance
Explanation- The Trial Balance offers a summary of the Ledger. The details of ledger are available in the ledger book.
Q.17 Final Accounts are prepared with the help of
a. journal.
b. ledger.
c. trial balance.
d. balance sheet.
Answer:
(c) Trial balance
Explanation- Financial Statements are normally prepared on the basis of Trial balance. Otherwise, the work may be difficult, if not impossible. Preparation of financial statements, therefore, is the second objective of preparing a Trial Balance.
Q.18 Only the debit or credit balances are entered separately in the two-columns under
a. balance method.
b. totals method.
c. cash flow method.
d. subtraction method.
Answer:
(a) Balance method
Explanation- In this method, only the debit or credit balances are entered separately in the two columns. This is the commonly used method of preparing a Trial Balance because it facilitates the preparation of the final accounts.
Q.19 One item of purchase of Rs.25 has been posted from the Purchase Book to Ledger as Rs.350. The amount of rectifying journal entry will be
a. Rs. 25
b. Rs. 350
c. Rs. 325
d. Rs. 375
Answer:
(c)
Explanation- The correct amount to be posted is Rs. 25, but wrongly the amount posted is Rs. 350. Hence rectifying entry will be made with Rs. 325
Q.20 The total of each side of the account is entered respectively in the debit and credit columns of the Trial balance. It is called
a. balance method.
b. subtraction method.
c. cash flow method.
d. totals method.
Answer:
(d) Totals Method
Explanation- In this, the total of each side of the account is entered respectively in the debit and credit columns of the Trial balance.
Q.21 Name the primary book of accounts in which transactions are originally recorded in a chronological order.
a. cash book.
b. journal.
c. sales book.
d. purchases book.
Answer:
(b) Journal
Explanation- Journal is that primary book of accounts in which transactions are originally recorded in a chronological (day-to-day) order. It is called the book of original entry.
Q.22 Correct the following error by opening a Suspense Account-
‘Goods worth Rs. 1500 returned by Green & Co. have not been recorded anywhere.’
a. Returns Inward A/c......................Dr.
To Green & Co. A/c
b. Returns Outward A/c......................Dr.
To Green & Co. A/c
c. Green & Co. A/c.............................Dr.
To Returns Outward A/c
d. Green & Co. A/c.............................Dr.
To Returns Outward A/c
Answer:
(a)
Explanation- The journal entry will be passed –
Returns Inward A/c.....................Dr. 1500
To Green & Co. A/c 1500
(Being the recording of unrecorded returns)
Q.23 In the first column of Trial balance contains
a. name.
b. date.
c. particulars.
d. amount.
Answer:
(a) Name
Explanation- While preparing a Trial Balance, in the first column the name of the account is written.
Q.24 Salary of Rs.1250 paid to a clerk has been debited to his personal account. The rectification entry will be
a. Clerks’ A/c......................Dr.
To Salaries A/c
b. Salary A/c.....................Dr.
To Outstanding Salary A/c
c. Clerks’ A/c......................Dr.
To Outstanding Salary A/c
d. Salaries A/c....................Dr.
To Clerks’ A/c
Answer:
(d)
Explanation- The entry will be-
Salaries A/c................................Dr. 1250
To Clerks’ (Personal) A/c 1250
(Correction of wrong debit to clerks’ personal A/c for salaries paid)
Q.25 If an amount to be credited to a nominal account is omitted the loss will be
a. decreased.
b. increased.
c. neutral.
d. zero.
Answer:
(b) Increased
Explanation- Suppose, amount of interest received on investments is omitted from posting in interest account. As a result of this, the amount of profit will be reduced because amount of interest received will not be entered on the credit side of Profit and Loss Account.
Q.26 If the amount due from debtor is not realised, it is known as
a. bad debts.
b. debtor.
c. overdraft.
d. creditor.
Answer:
(a) Bad debts
Explanation- When a debtor becomes bankrupt, i.e. unable to pay one’s debts, the entire amount due from him is not realised. The unrealised amount is a loss to business, the same is called Bad Debts.
Q.27 Date of Trial Balance is written on
a. right side corner.
b. left side corner.
c. top.
d. bottom.
Answer:
(c) Top
Explanation- Trial Balance is prepared on a particular date which should be written on the top.
Q.28 The two-columns of Trial balance are
a. subtracted.
b. totalled.
c. divided.
d. multiplied.
Answer:
(b) Totalled
Explanation- The two-columns of Trial Balance are totalled at the end.
Q.29 The total of the credit side of the trial balance is written on the
a. fourth column.
b. third column.
c. second column.
d. first column.
Answer:
(a) Fourth Column
Explanation- In the fourth column of Trial Balance, the total of the credit side or the credit balance is written. It is the last column of the trial balance.
Q.30 Sometime insolvent debtor whose account had been earlier written off as ‘Bad Debts’ pays some amount. This amount is credited to
a. bad debts.
b. cash withdrawn.
c. debtors.
d. bad debts recovered.
Answer:
(d) Bad Debts recovered
Explanation- Sometime insolvent debtor whose account had been earlier written off as ‘Bad Debts’ pays some amount.The amount so received is a gain to the business and is known as Bad Debts Recovered.The entry of bad debts recovered is:
Cash/Bank A/c Dr.
To Bad Debts Recovered A/c
MCQ Questions for Chapter 6-Trial Balance and Rectification of Errors class 11 Accountancy (Questions set-2)
Q.31 Rs. 10,000 paid for new furniture has been charged to repairs. The rectifying journal entry will be
a. Repairs A/c.....................Dr.
To Furniture A/c
b. Furniture A/c...................Dr.
To Cash A/c
c. Cash A/c..........................Dr.
To Repairs A/c
d. Furniture A/c......................Dr.
To Repairs A/c
Answer:
(d)
Explanation- In this case furniture a/c should be debited instead of repairs a/c.
Q.32 The following method of Trial balance considers all accounts of the Ledger
a. balance method.
b. subtraction method.
c. totals method.
d. cash flow method.
Answer:
(c) Totals Method
Explanation- Trial balance by Totals Method considers all accounts of the Ledger.
Q.33 When the bank allows the firm to withdraw more than the amount deposited then it is called
a. bank charges.
b. overdraft.
c. fixed deposit .
d. demand draft.
Answer:
(b) Overdraft
Explanation- When the bank allows the firm to withdraw more than the amount deposited. This is called an overdraft. In such a case, the total of the bank column on the credit side will be bigger than the one on the debit side.
Q.34 Trial Balance can be prepared immediately after the completion of posting under
a. totals method.
b. balance method.
c. subtraction method.
d. cash flow method.
Answer:
(a) Totals Method
Explanation- Trial balance by Totals Method can be prepared immediately after the completion of posting from books of original entry to the Ledger.Accountant need not to wait for the balancing of accounts.
Q.35 Trial Balance can be prepared after all the Ledger accounts have been balanced under
a. totals method.
b. subtraction method.
c. cash flow method.
d. balance method.
Answer:
(b) Balance Method
Explanation- Trial Balance by Balance Method can be prepared after all the Ledger accounts have been balanced. Trial balance is prepared on the basis of balances here.
Q.36 The allowance to encourage prompt payment of amount due is known as
a. trade discount.
b. retail discount.
c. credit discount.
d. cash discount.
Answer:
(d) Cash discount
Explanation- Cash discount is an allowance to encourage prompt payment of amount due. Cash discount, received or allowed is recorded separately in the books.
Q.37 A Trial Balance is prepared with the help of a Ledger and
a. journal.
b. balance sheet.
c. cash book.
d. sales book.
Answer:
(b) Cash Book
Explanation- A Trial balance is prepared with the help of a Ledger and a Cash Book.
Q.38 When the owner withdraws any money or goods from the business for his personal use then it is known as
a. overdraft
b. prepaid expenses.
c. capital.
d. drawings.
Answer:
(d) Drawings
Explanation- It is treated as decrease in purchase and not increase in sales as no profit is earned on such goods.
Q.39 Plant and Machinery, Furniture and Fixtures, Motor Car are the example of
a. current liabilities.
b. fixed assets.
c. fixed liabilities.
d. current assets.
Answer:
(b) Fixed Assets
Explanation- Account of assets such as Plant and Machinery, Furniture and Fixtures, Land and Building and Motor car show a debit balance in the Trial Balance.
Q.40 Credit purchases or goods dealt in or of materials and stores used in the factory are recorded in a separate register called
a. sales book.
b. purchases return book.
c. purchases book.
d. sales return book.
Answer:
(c) Purchases book
Explanation- Credit purchases or goods dealt in or of materials and stores used in the factory are recorded in a separate register calledthe purchases book or the purchase journal.
Q.41 The allowance to encourage prompt payment of amount due is known as
a. trade discount.
b. retail discount.
c. credit discount.
d. cash discount.
Answer:
(d) Cash discount
Explanation- Cash discount is an allowance to encourage prompt payment of amount due. Cash discount, received or allowed is recorded separately in the books.
Q.42 Prepaid expenses is the part of
a. Long-term liability.
b. Current assets.
c. Current Liability.
d. Fixed assets.
Answer:
(b) Current assets
Explanation- Prepaid expenses is the part of current assets which can be converted into cash within a period of one year.
Q.43 Accounts of incomes and gains show
a. debit balance.
b. credit balance.
c. negative balance.
d. zero balance.
Answer:
(b) Credit balance
Explanation- Accounts of incomes and gains show credit balances and are shown on the credit side of a Trial Balance.
Q.44 An amount of Rs.2000 due from Mahesh Chand which had been written off as a Bad Debt in a previous year was unexpectedly recovered. Give journal entry to rectify the error.
a. Mahesh Chand.........................Dr.
To Bad Debts A/c
b. Bad Debts Recovered A/c................Dr.
To Mahesh Chand
c. Bad Debts..............................Dr.
To Mahesh Chand
d. Cash a/c..........................Dr.
To Bad Debts Recovered A/c
Answer:
(d)
Explanation- In this case Mahesh chand’s a/c will remain unaffected because it is already closed.
Q.45 The Return Inward Account always shows a
a. credit balance.
b. zero balance.
c. debit balance.
d. negative balance.
Answer:
(c) Debit Balance
Explanation- The returns Inward Account or Sales Return Account always shows a debit balance and hence is shown on the debit column of a Trial Balance.
Q.46 Assets like Plant and Machinery, land and Building show a
a. credit balance.
b. zero balance.
c. debit balance.
d. negative balance.
Answer:
(c) Debit balance
Explanation- Account of assets such as Plant and Machinery, Furniture and Fixtures show a debit balance and are shown in the debit column of a Trial Balance.
Q.47 Formula for calculating liability is
a. Assets + Liabilities.
b. Assets - Liabilities.
c. Assets + Capital.
d. Assets - Capital.
Answer:
(d) Assets - Capital
Explanation- Liabilities are debts, they are amounts owed to creditors. Thus, the claims who are not owners are called ‘‘Liabilities.’’
Q.48 If the firm issues promissory notes then such transactions are recorded in a separate book called
a. bills receivable book.
b. sales book.
c. purchases book.
d. bills payable book.
Answer:
(d) Bills payable book
Explanation- If the firm issues promissory notes or hundis then a separate book called Bills Payable Book is prepared.
Q.49 Expenses that relate to current year and are unpaid till the year end are known as
a. prepaid expenses.
b. sundry expenses.
c. undue expenses.
d. outstanding expenses.
Answer:
(d) Outstanding expenses
Explanation- For example, Wages for the year ending 31st March, 2002 are Rs. 8,000. Out of this wages Rs.1000 for the month of March, 2002 have been paid in April 2002. Since, Rs.1000 as on 31st March, 2002 is yet to be paid it should be recorded in the books by passing the following journal entry:
Wages A/c ......Dr. 1,000
To Outstanding Wages A/c 1,000
Q.50 Payment of insurance, rent of shop in advance are the examples of
a. outstanding expenses.
b. sundry expenses.
c. prepaid expenses.
d. amount due.
Answer:
(c) Prepaid expenses
Explanation- Normally payment of certain expenses like Insurance, Rent of Shop etc, are paid in advance. Such expenses are termed as advance or prepaid expenses.
Q.51 Fall in the value of assets is known as
a. outstanding expenses.
b. prepaid expenses.
c. sundry expenses.
d. depreciation.
Answer:
(d) Depreciation
Explanation- Due to continuous use of fixed assets, value of these assets keeps on decreasing every year. This diminition is called the depreciation.
Q.52 Formula for calculating capital is
a. Assets + Liabilities.
b. Assets - Liabilities.
c. Assets - Capital.
d. Assets + Capital.
Answer:
(b) Assets – Liabilities
Explanation- Capital is also known as Owner’s Equity, proprietorship and net worth. Owner’s Equity means owner’s claim against the assets of the business. It will always be equal to assets less liabilities.
Q.53 Opening Stock Account shows a
a. credit balance.
b. zero balance.
c. debit balance.
d. negative balance.
Answer:
(c) Debit Balance
Explanation- The Opening Stock shows a debit balance which is shown on the debit column of a Trial balance.
Q.54 The total of both the sides of account equal and to write the difference in the side whose total is short is known as
a. totalling of accounts.
b. balancing of accounts.
c. cash accounting.
d. capital accounting.
Answer:
(b) Balancing of account
Explanation- For example, if total of credit side is more than the debit side of any account the difference of amount will be recorded as Balance c/d on debit side and vice versa on the credit side.
Q.55 If Shyam’s A/c was debited with Rs.100 instead of Rs.1,000 while Ram Prasad’s A/c was debited with Rs.1000 instead of Rs.100. The error will be called as
a. errors of principle.
b. errors of commission.
c. errors of omission.
d. compensating error.
Answer:
(d)
Explanation- Compensating errors are those errors the effect of which is nullified by another error of equal amount. Thus Shyam’s account was less debited by Rs.900 was compensated by another error of Ram Prasad’s account whose account was excess debited by Rs.900. Such errors do not effect the Trial Balance.
Q.56 Rs.100 received from Kamal Kishore has been credited in the account of Krishna Kishore. The rectifying entry for the same will be
a. Krishna Kishore............................Dr.
To Kamal Kishore
b. Cash A/c...................................Dr.
To Krishna Kishore
c. Kamal Kishore.............................Dr.
To Cash A/c
d. Krishna Kishore............................Dr.
To Cash A/c
Answer:
(a)
Explanation- Since Krishan Kishore was wrongly credited so we will debit his account.
Q.57 Liabilities plus Capital is equal to
a. Liabilities.
b. Drawings.
c. Assets.
d. Capital.
Answer:
(c) Assets
Explanation- The equation says that the assets of a business are always equal to the claims of owners and the outsiders.
Q.58 Liabilities, capital, creditors, incomes and gains show
a. debit balance.
b. credit balance.
c. negative balance.
d. zero balance.
Answer:
(b) Credit balance
Explanation- Credit balances: Liabilities, capital, creditors, incomes and gains. These are always shown on the credit side of trial balance.
Q.59 Examples of assets other than fixed assets are
a. machinery and plant.
b. creditors and short-term loans.
c. long term loans and public deposits.
d. stock and prepaid expenses .
Answer:
(d) Stock and prepaid expenses
Explanation- Current assets are those assets which can be converted into cash within a period of one year.
Q.60 A Trial Balance is
a. a summary.
b. an account.
c. an overdraft.
d. a statement.
Answer:
(d) A Statement
Explanation- A Trial Balance is a statement of accounts appearing in the Ledger.
Q.61 Preparation of Trial Balance is
a. compulsory.
b. optional.
c. a formality.
d. is related to capital only.
Answer:
(b) Optional
Explanation- Preparation of Trial Balance is optional. It may be prepared by taking the balances of each account.
Q.62 Debit balances of accounts are recorded in Trial Balance in the following column:
a. debit.
b. credit.
c. negative.
d. zero.
Answer:
(a) Debit
Explanation- Debit balances of accounts are recorded in debit column of Trial Balance.
Q.63 Final accounts are prepared on the basis of
a. balance sheet.
b. journal.
c. ledger.
d. trial balance
Answer:
(d) Trial balance
Explanation- Trial Balance shows arithmetical accuracy. That’s why Final Accounts are prepared on the basis of Trial Balance.
Q.64 A Trial Balance is not a part of the double entry system of
a. final accounts.
b. journal.
c. ledger.
d. book keeping.
Answer:
(d) Book keeping
Explanation- A Trial balance is not a part of the double entry system of book keeping.
Q.65 The procedure followed to rectify the errors committed and to set right accounting records is called
a. modification of errors.
b. rectification of errors.
c. double entry system.
d. single entry system.
Answer:
(b) Rectification of errors
Explanation- Errors, whether affecting the Trial Balance or not must be detected and corrected. The procedure followed to rectify the errors committed and to set right accounting records is called Rectification of errors.
Q.66 On the basis of nature errors can be classified into
a.three parts.
b. five parts.
c. four parts.
d. two parts.
Answer:
(c) Four parts
Explanation- All errors can be classified into four categories:
1. Error of Principle
2. Error of Omission
3. Error of Commission
4. Compensating Errors
Q.67 Exhibiting a true financial position of the concern on a particular date by preparing the Balance Sheet with the correct accounting data is the objective of
a. modification of errors.
b. rectification of errors.
c. double entry system.
d. single entry system.
Answer:
(b) Rectification of error
Explanation- The objective of rectifying error is to exhibit a true financial position of the concern on a particular date by preparing the Balance Sheet with the correct accounting data.
Q.68 Net profit or net loss are ascertained for the accounting period by preparing the
a. profit and loss account.
b. trading account.
c. balance sheet.
d. trial balance.
Answer:
(a) Profit and Loss Account
Explanation- The objective of the rectifying error is to ascertain the correct net profit or net loss for the accounting period by preparing the Profit and Loss Account with the correct figures.
Q.69 When a transaction is recorded in contravention of accounting principles, it is known as
a. error of omission.
b. error of principle.
c. error of commission.
d. compensating errors.
Answer:
(b) Error of Principle
Explanation- When a transaction is recorded in contravention of accounting principles, it is known as an error of principle. Such errors do not affect the Trial Balance as amounts are placed on the correct side but in a wrong account.
Q.70 Preparing correct accounting records is the objective of
a. modification of errors.
b. single entry system.
c. double entry system.
d. rectification of errors.
Answer:
(d) Rectification of errors
Explanation- The objective of rectifying error is to prepare correct accounting records.
Q.71 Error of Omission can be divided into
a. two parts.
b. three parts.
c. five parts.
d. eight parts.
Answer:
(a) Two parts
Explanation- Error of Omission can be divided into two parts:
(i) Error of Complete Omission
(ii) Error of Partial Omission
Q.72 Errors which arise due to wrong recording, wrong posting, wrong carrying forward etc. are known as
a. error of omission.
b. error of principle.
c. error of commission.
d. compensating errors.
Answer:
(c) Error of Commission
Explanation- Errors of commission are errors which arise due to wrong recording, wrong posting, wrong carrying forward, wrong casting of subsidiary books, wrong balancing etc.
Q.73 If a transaction is not recorded in the books of account. It is the
a. error of commission.
b. error of principle.
c. error of partial omission.
d. error of complete omission.
Answer:
(d) Error of Complete Omission
Explanation- Error of Complete Omission arises if a transaction is not recorded in the books of account at all. Such errors do not affect the Trial Balance.
Q.74 Clerical errors can be of
a. two types.
b. three types.
c. five types.
d. four types.
Answer:
(b) Three types
Explanation- Clerical errors can be classified into:
(a) Errors of Omission
(b) Errors of Commission
(c) Compensating Errors
Q.75 When any transaction is incorrectly recorded in the books of original entry it comes under the
a. error of recording.
b. error of casting.
c. error of posting.
d. error in carrying forward,
Answer:
(a) Error of recording
Explanation- This error arises when any transaction is incorrectly recorded in the books of original entry.
Example: Goods of Rs.7,000 purchased on credit from Sohan are recorded in the purchases books as Rs. 70,000.
Q.76 When information recorded in the books of original entry are incorrectly entered in the Ledger then this is known as
a. error of recording.
b. error of casting.
c. error in carrying forward.
d. error of posting.
Answer:
(d) Error of posting
Explanation- This error arises when information recorded in the books of original entry are incorrectly entered in the Ledger.
Example-Posting the total of the Sales Book in the Purchases Account instead of the Sales Account.
Q.77 When a mistake is committed in totalling it is known as
a. error of recording.
b. error in carrying forward.
c. error of casting.
d. error of posting.
Answer:
(c) Error of Casting
Explanation- This error arises when a mistake is committed in totalling.
Example-Purchase Book is totalled as Rs. 20,000 instead of Rs. 2, 00,000.
Q.78 When a mistake is committed in carrying forward a total of one page to the next page it is known as
a. error of recording.
b. error of carrying forward.
c. error of posting.
d. error of casting.
Answer:
(b) Error of Carrying Forward
Explanation- This error arises when a mistake is committed in Carrying Forward a total of one page to the next page.
Example- Total of Purchases Book is carried forward as Rs. 10,000 instead of Rs. 1,000.
Q.79 Those errors the effect of which is nullified by another error of equal amount is known as
a. error of omission.
b. error of commission.
c. error of principle.
d. compensating errors.
Answer:
(d) Compensating errors
Explanation- Compensating errors are those errors the effect of which is nullified by another error of equal amount, e.g., Shyam’s Account was debited with Rs. 100 instead of Rs. 1,000 while Ram Prasad’s Account was debited with Rs. 1,000 instead of Rs. 100. Thus, Shyam’s Account which was debited by Rs. 900 less was compensated by another error in Ram Prasad’s account whose account was debited excess of Rs. 900. Such errors do not affect the Trial balance.
Q.80 The following errors affect the Trial Balance-
a. one-sided error.
b. two-sided error.
c. debit-sided error.
d. credit-sided error.
Answer:
(a) One-sided error
Explanation- The Trial Balance is affected by one-sided error and not by the other type. When the errors are rectified before transferring the difference in the Trial Balance to the Suspense Account, it is done by debiting the concerned amount in the ledger for short debit or excess credit and by crediting the concerned account for short credit or excess debit.
Q.81 The process of totalling the amount of transactions at the end of a given period is known as
a. forecasting.
b. casting.
c. compensating.
d. rectifying.
Answer:
(b) Casting
Explanation- Casting means the process of totalling the amount of transactions at the end of the given period. We know that the books of original entry (Subsidiary Book) such as Purchases Book, Sales Book etc. are posted to the ledger in one account namely Purchases Account or Sales Account with the total amount of credit purchases or credit sales respectively for a given period.
Q.82 Under totalling of Purchases Book is known as
a. undercasting.
b. overscating.
c. casting.
d. compensating.
Answer:
(a) Undercasting
Explanation- Undercasting of Purchases Book means undertotalling of Purchases Book which further means that Purchases Account has been debited less with the amount of undertotal of the Purchases Book.
Q.83 Excess credit is corrected by
a. additional debit.
b. additional credit.
c. crediting the difference amount.
d. debiting the difference amount.
Answer:
(d) Debiting the difference amount
Explanation- Excess credit is corrected by debiting the difference amount.
Q.84 Short debit is corrected by
a. additional debit.
b. additional credit.
c. crediting the difference amount.
d. debiting the difference amount.
Answer:
(a) Additional debit
Explanation- Short debit is corrected by additional debit.
Q.85 Excess debit is credited by
a. debiting the difference amount.
b. additional debit.
c. crediting the difference amount.
d. additional credit.
Answer:
(c) Crediting the difference amount
Explanation- Excess debit is credited by crediting the difference amount.
MCQ Questions for Chapter 6-Trial Balance and Rectification of Errors class 11 Accountancy (Questions set-3)
Q.86 Short credit is corrected by
a. crediting the difference amount.
b. additional credit.
c. additional debit.
d. debiting the difference amount.
Answer:
(b) Additional credit
Explanation- Short credit is corrected by additional credit.
Q. 87 Sometimes, when the accountant is not in a position to locate the difference in the Trial Balance and he is in a hurry to close the books of account, he may then put the Trial balance difference to a newly opened account known as the
a. cash account.
b. suspense account.
c. bank account.
d. drawings account.
Answer:
(b) Suspense Account
Explanation- Suspense Account is an account to which the difference in the Trial Balance has been put temporarily. If the credit side is short, the Suspense Account will be credited and if the credit side is bigger, this account will be debited. With the inclusion of this account in the Trial Balance, it will appear to agree.
Q.88 Suspense Account is also used for rectifying all
a. one-sided error.
b. two-sided error.
c. debit-sided error.
d. credit-sided error.
Answer:
(a) One-sided error
Explanation- Remember, only those errors which affect the Trial Balance are rectified by passing their double entry in the debit or credit side of the Suspense Account.
Q.89 Goods worth Rs. 350 sold to Hari on credit was omitted from accounts although cash received subsequently from him stands posted to his credit. The relevant entry will be
a. Sales Account....................Dr.
To Hari
b. Hari.................................Dr.
To Cash A/c
c. Cash A/c............................Dr.
To Hari
d. Hari..................................Dr.
To Sales Account
Answer:
(d)
Explanation- The entry will be-
Hari................................Dr. 350
To Sales Account 350
(Being goods sold to Hari not recorded in the books, now recorded)
Q.90 Errors which arise due to mistakes committed in the course of accounting are known as
a. mechanical error.
b. automated error.
c. clerical error.
d. two-sided error.
Answer:
(c) Clerical error
Explanation- Clerical errors which arise due to mistakes committed in the course of accounting.
Q.91 Into how many errors a clerical error can be classified
a. four.
b. three.
c. five.
d. eight.
Answer:
(b) Three
Explanation- Clerical errors may be classified as:
1. Error of Omission
2. Error of Commission
3. Compensating Error
Q.92 An item of Rs.53 has been debited to a personal account as Rs. 35. It is an error of
a. error of principle.
b. error of commission.
c. compensating error.
d. error of omission.
Answer:
(b) Error of Commission
Explanation- Transaction wrongly written in the subsidiary book or in the ledger or wrong posting is known as error of commission.
Q.93 Rs.2000 paid wages for erecting a machine should be debited to
a. machinery account.
b. capital account.
c. cash account.
d. wages account.
Answer:
(a) Machinery account
Explanation- All the expenses incurred on the set-up of any asset are added to the account of that asset only.
Q.94 On purchase of old furniture, the amount of Rs.1000 spent on its repairs should be debited to
a. furniture account.
b. repairs account.
c. cash account.
d. bank account.
Answer:
(a) Furniture Account
Explanation- All the repairs done at the time of purchase of fixed assets are debited to asset account.
Q.95 Goods worth Rs. 500 given as charity should be credited to
a. charity account.
b. sales account.
c. sales return account.
d. purchases account.
Answer:
(d) Purchases Account
Explanation- The entry for the same will be-
Charity A/c Dr. 500
To Purchases A/c 500
Q.96 Goods worth Rs. 1000 taken by the proprietor for domestic use should be credited to
a. sales account.
b. drawings account.
c. purchases account.
d. purchases return account.
Answer:
(c) Purchases Account
Explanation- The entry will be-
Drawings A/c Dr. 1000
To Purchases A/c 1000
Q.97 The preparation of a Trial Balance helps in
a. correct totalling of the Trial balance.
b. locating errors of principle.
c. locating error of commission.
d. correct totalling of the Balance Sheet.
Answer:
(d) Correct totalling of the Balance Sheet
Explanation- Trial Balance helps in the preparation of final accounts.
Q.98 Goods destroyed by fire should be credited to
a. goods lost by fire account.
b. trading account.
c. sales account.
d. cash account.
Answer:
(b) Trading account
Explanation- The entry will be-
Loss by Fire A/c Dr.
To Trading A/c
Q.99 Sale of office furniture should be credited to
a. furniture account.
b. sales account.
c. cash account.
d. bank account.
Answer:
(a) Furniture account
Explanation- When ever fixed assets are sold, sales a/c is not credited but that particular asset a/c is credited.
Q.100 An asset has been purchased for the firm. However, the amount was debited to purchases account. It is an error of
a. commission.
b. omission.
c. principle.
d. errors.
Answer:
(c) Principle
Explanation- Errors of Principle means transactions are recorded in contravention of accounting principles.
Related Links
- Chapter 1-Introduction to Accounting
- Chapter 2-Theory Base of Accounting
- Chapter 3-Recording of Transactions-1
- Chapter 4-Recording of Transaction-2
- Chapter 5-Bank Reconciliation statement
- Chapter 6-Trial Balance and Rectification of Errors
- Chapter 7-Depreciation, Provisions and Reserves
- Chapter 8-Bills of Exchange
- Chapter 9-Financial Statements-1
- Chapter 10-Financial Statements-2
- Chapter 11-Accounts of Incomplete Records
- Chapter 12-Applications of Computers in Accounting
- Chapter 13-Computerised Accounting System
- Chapter 14-Structuring Database for Accounting
- Chapter 15-Accounting System Using Database Management System