Trial Balance, Rectification of Errors and Final Accounts Multiple Choice-2

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1.    An entry of Rs.600 was wrongly posted to wages account instead of machinery account, as wages are to be capitalized it is an error of :

1. Omission                                                           2. Commission

3. Principle                                                            4. Clerical error

2.    A customer’s cheque returned dishonoured is recorded in :

1. purchase return book                                        2. Sales return book

3. cash book                                                         4. Journal

3.    The main purpose of preparing a trial balance is :

1.    to prepare a summary of all the balance

2.    to compare the debit balance with credit balance

3.    to locate all types of errors

4.    to check the arithmetic accuracy of the ledger accounts

4.    Which of the following errors is revealed by trial balance ?

1.    wrong amount entered in the book of original entry

2.    wrong amount entered in a ledger account

3.    complete omission of an entry from the book of original entry

4.    all of the above

5.    Which of the following errors will cause the trial balance to be out of balance ?

1.    the total of the purchase book is Rs.1,000 short

2.    goods received back from Mahesh, Rs.250 have not been entered in the returns inward book

3.    a purchase of Rs.25 from Gopal and Co. has been entered in the purchase book as Rs.251.

4.    none of these

6.    Which of the following errors are revealed by the trial balance ?

1.    treating an expense as an asset        

2.    posting an amount on the correct side but in the wrong account

3.    compensating errors

4.    none of these

7.    Cash sales of Rs.2,520 was posted as 2,250 the rectifying entry will be –

1.    Cash a/c – Dr.170 – To Sales a/c – 170

2.    Suspense a/c – Dr.170 – To Sales a/c – 170

3.    Cash a/c – Dr.170 – To Suspense a/c – 170

4.    None of these

8.    Purchased goods for the personal use of the proprietors Rs.1,300, debited to purchase account, the rectifying entry will be :

1.    Suspense a/c – Dr. 1,300 – To Purchase a/c – 1,300

2.    Drawing a/c – Dr.1,300 – To Cash a/c – 1,300

3.    Drawing a/c – Dr. 1,300 – To Purchase a/c – 1,300

4.    None of these

9.    The difference between trial balance where to put :

1. Personal a/c                                                      2. Impersonal a/c

3. nominal a/c                                                       4. Suspense a/c

10.  If trial balance on the debit side is short, then :

1.    Suspense a/c need not be opened

2.    Suspense a/c is opened with debit short balance

3.    Suspense a/c is opened with credit balance

4.    None of these

11.  If trial balance is short on credit side  :

1.    open the suspense a/c with debit balance

2.    open the suspense a/c with credit balance

3.    need not to open account

4.    none of these

12.  Rs.100 received from Ravi, Shiva had been posted to Raju Shiva account. … will be rectified entry :

1.    Raju Shiva a/c – Dr. 1000 – To Ravi Shiva a/c – 100

2.    Suspense a/c – Dr.100 – To Shiva a/c – 100

3.    Raju a/c – Dr.100 – To Ravi a/c – 100

4.    None of these

13.  The balance of the petty cash is :

1. an expense                                                       2. An income

3. an asset                                                             4. None of these

14.  Fixed assets are :

1.    kept in the business for use over a long time for earning income

2.    meant for resale

3.    meant for conversion into cash as quickly as possible

4.    none of these

15.  Goodwill is :

1. a current asset                                                  2. Intangible assets

3. tangible asset                                                    4. Fixed assets

16.  Current liabilities are such obligations which are to be satisfied :

1. within one year                                                  2. Within two year                  

3. Within three year                                               4. More than five years

17.  Which is the following is the current liabilities ?

1. creditors                                                            2. Bills payable a/c

3. unclaimed dividend                                           4. All of the above

18.  Out of the following, the example of a current asset is :

1. surrender value of life insurance policy            2. Discount on debenture

3. bill receivable                                                    4. None of these

19.  Stock is :

1. a current assets                                                2. Intangible assets

3. included in the category of fixed assets           4. None of these

20.  Profit and loss account is :

1. personal account                                              2. Real account

3. nominal account                                               4. None of these

21.  Profit and Loss account shows :

1. financial position of the concern                       2. Net profit earned

3. the net gross profit earned                                4. The gross profit earned

22.  Trading account shows :

1. gross profit                                                        2. Cost of goods sold

3. gross loss                                                          4. All the above

23.  GP = net sales - ?

1. net purchase                                                     2. Gross expenses

3. cost of goods sold                                             4. None of these

24.  Closing stock is valued at :

1. cost                                                                   2. Market value

3. cost or market price which ever is lower          4. All the above

25.  Manufacturing account is prepared :

1.    to ascertain the profit or loss on the goods purchased

2.    to ascertain the cost of the manufactured goods

3.    to show the sale proceeds from the goods produced during the year

4.    none of these

26.  Goods purchased were for Rs.12,000 and goods remain unsold Rs.2,000. In such a case, the cost of goods sold will be :

1. Rs.2,000                        2. Rs.14,000                3. Rs.10,000                4. Rs.12,000

27.  Opening stock is Rs.5,000 wage were Rs.2,500 and goods purchased Rs.20,000 net sales is Rs.15,000 closing stock is Rs.20,000, than what is the value of gross profit ?

1. Rs.7,000                        2. Rs.5,000                  3. Rs.7,500                  4. Rs.12,000

28.  Opening stock Rs.10,000 purchases (net) Rs.75,000 direct expenses Rs.5,000, closing stock Rs.15,000 and sales (net) Rs.1,00,000. The value of cost of goods sold will be :

1. Rs.70,000                      2. Rs.75,000                3. Rs.60,000                4. Rs.72,000

29.  Above mentioned example the value of gross profit is :

1. Rs.20,000                      2. Rs.22,000                3. Rs.29,000                4. Rs.25,000

30.  Manufacturing Account concern to … A/c

1. Profit and loss a/c                                             3. Trading a/c

3. Both 1 and 2                                                      4. None of these

ANSWERS

            1.3       2.3       3.4       4.2       5.1       6.4   7.2       8.3       9.4       10.2     11.2     12.1     13.3     14.1     15.2     16.1     17.4     18.3  19.1     20.3     21.2     22.3     23.3     24.3     25.2     26.3     27.3     28.2     29.4     30.2

Trial Balance, Rectification of Errors and Final Accounts Multiple Choice

1.    In book-keeping posting means :

1.    to record the transaction only

2.    To record the transaction from journal to the ledger

3.    To record the transaction only in ledger

4.    None of these

2.    The basic rule of book-keeping, debit the receiver and credit the giver is applicable to :

1. Personal account                                              2. Real account

3. Nominal account                                               4. None of these

3.    Goods of the value of Rs.1,500 taken by the proprietor for his personal use should be debited to :

1. sales account                                                    2. Purchase account

3. drawing account                                               4. None of these

4.    Goods destroyed by fire should be credited to :

1. purchase account                                             2. Sales account

3. loss of goods by fire account                            4. None of these

5.    The credit balance of bank account indicates.

1. amount payable by the bank                            2. Amount payable to the bank

3. amount receivable to the bank                         4. Cash at bank

6.    Which is the following is the preparing the trial balance method is ?

1. Total method                                                     2. Balance method

3. Both 1 and 2                                                      4. Neither of above 1 & 2

7.    Which of the following accounts will invariably have a debit balance ?

1. bank account                                                    2. Account receivable a/c

3. accounts payable a/c                                        4. None of these

8.    Which of the following accounts have only credits balance ?

1. accounts payable account                                2. Salaries outstanding a/c

3. reserve funds a/c                                              4. All of the above

9.    Which of the following accounts may have a debit or credit balance ?

1. Discount received account                               2. Sales account

3. Trade expenses a/c                                          4. Loan a/c

10.  The error in the casting of sale book is called as :

1. Clerical error                                                     2. Error of principle

3. compensating error                                           4. None of these

11.  Error of commission arises when :

1.    any transaction is in correctly recorded, either wholly or party.

2.    Any transaction is left either wholly or partially.

3.    Any transaction is recorded in a fundamentally incorrect manner

4.    None of these

12.  Wages paid for the erection of a machine debited to wages account is an example of :

1. error of principle                                                2. Clerical error

3. compensating error                                           4. None of these

13.  Error of balancing affects – accounts :

1. One account                                                     2. Two accounts

3. Two or more accounts                                      4. None of these

14.  Preparation of trial balance helps in locating errors of :

1. omission                        2. A clerical nature      3. Commission            4. All types

15.  An entry of Rs.840 being debited to sonali’s a/c as Rs.480 would be an error of :

1. commission                                                       2. Omission

3. principle                                                             4. Negligible significance

16.  An entry of Rs.1,000 being wrongly posted to wages a/c instead of machinery a/c would be an error of ?

1. omission                                                            2. Commission

3. principle                                                             4. A clerical nature

17.  An expense of Rs.500 on cartage of a new machine purchased should be debited to :

1. cash a/c                                                            2. Miscellaneous expenses a/c

3. cartage a/c                                                        4. Machine a/c

18.  Error which affect one account can be :

1. errors of omission                                             2. Errors of principle

3. errors of posting                                                4. None of these

19.  Error of carry forward affect –

1. personal a/c                                                      2. Impersonal a/c

3. nominal a/c                                                       4. Suspense a/c

20.  Sales of Ram, Rs.336, posted to his account as Rs.363 affect …

1. sales account                                                    2. Ram’s account

3. both 1 and 2                                                      4. None of these

21.  Sales to Uma Rs.336 have been debited to Thulasi account. This will be rectified by :

1.    Uma a/c – Dr. To Thulasi a/c

2.    Thulasi a/c – Dr. To Uma a/c

3.    Crediting both the account

4.    None of these

22.  Sales to Mahesh Rs.336, were not recorded this will affect –

1. purchase account                                             2. Sales account

3. mahesh account                                               3. Both 2 and 3

23.  Cartage paid, Rs.50 for the newly purchased machinery, if debited to cartage account will affect ;

1. only machinery account                                   2. Only cartage account

3. both 1 and 2                                                      4. None of these

24.  Goods purchase from Raju for Rs.1,000 were passed through sales book. The rectification of the error will :

1. increase the gross profit                                   2. Decrease the gross profit

3. neither of the two                                              4. Only Raju account affect

25.  An amount of Rs.200 paid to Bixam against an acceptance was debited to Pandu’s account. The rectification of the error will :

1. increase the net profit                                       2. Bixam’s account increase

3. reduce net profit                                                4. Have no effect on the net profit

26.  An amount of Rs.300 written off as bad debt was received from X and was credited to X’s personal account. The rectification of this entry will :

1. increase net profit by Rs.300                            2. Reduce net profit by Rs.300

3. both 1 and 2                                                      4. None of these

27.  Discount allowed Rs.93 to Mohan has been credited to his account by Rs.39. the error will be rectified by :

1. Debiting Mohan by Rs.54                                 2. Crediting Mohan by Rs.54

3. Debiting discount by Rs.54                               4. None of these

28.  Which item is shown on the debit side of a trial balance ?

1. purchase returns                                               2. Rent outstanding a/c

3. prepaid expenses                                              4. None of these

29.  Bills receivable book is a part of :

1. ledger                            2. Journal                    3. Balance sheet         4. None of these

30.  An entry of Rs.320 has been debited to vivek’s account as Rs.230. it is an error of :

1. commission                                                       2. Omission

3. principle                                                             4. None of these above 

Answers

1.2       2.1       3.3       4.1       5.2       6.3       7.2       8.4       9.4       10.1     11.1     12.1

13.1     14.2     15.1     16.3     17.4     18.3     19.2     20.2     21.1     22.4     23.1     24.2    

25.4     26.1     27.4     28.3     29.2     30.1