Chapter 6: Trial Balance and Rectification of Errors — Online MCQ Test
ACCOUNTANCY · Grade 11 · CBSE(NCERT)
Practice Chapter 6: Trial Balance and Rectification of Errors with a free chapter-wise online MCQ test.
This chapter covers: Arithmetical accuracy, Suspense account, Errors of omission, Errors of commission, Errors of principle, Compensating errors, One-sided errors, Two-sided errors.
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Chapter 6: Trial Balance and Rectification of Errors — Important Questions & Answers
What is the primary purpose of preparing a Trial Balance?
- A. To check the arithmetical accuracy of ledger accounts
- B. To prepare financial statements
- C. To record transactions
- D. To close the books of accounts
Answer: A. To check the arithmetical accuracy of ledger accounts
A Trial Balance is prepared to verify that the total debits equal total credits, ensuring arithmetical accuracy of ledger accounts.
A Trial Balance is prepared to verify that the total debits equal total credits, ensuring arithmetical accuracy of ledger accounts.
An error of omission occurs when:
- A. A transaction is completely omitted from the books of accounts
- B. A transaction is recorded on the wrong side
- C. A transaction is recorded with the wrong amount
- D. A transaction is recorded twice
Answer: A. A transaction is completely omitted from the books of accounts
An error of omission happens when a transaction is entirely left out from both the journal and ledger, affecting the completeness of records.
An error of omission happens when a transaction is entirely left out from both the journal and ledger, affecting the completeness of records.
Which type of error will NOT affect the Trial Balance?
- A. Error of principle
- B. One-sided error
- C. Error of omission (complete)
- D. Error of commission (partial)
Answer: A. Error of principle
An error of principle does not affect the Trial Balance because both debit and credit sides are equally affected, maintaining the balance.
An error of principle does not affect the Trial Balance because both debit and credit sides are equally affected, maintaining the balance.
What is a compensating error?
- A. Two or more errors that cancel out each other's effect on the Trial Balance
- B. An error recorded in the suspense account
- C. An error affecting only one side of the account
- D. An error in principle that affects net income
Answer: A. Two or more errors that cancel out each other's effect on the Trial Balance
A compensating error occurs when two errors cancel each other out, resulting in the Trial Balance still balancing despite the presence of errors.
A compensating error occurs when two errors cancel each other out, resulting in the Trial Balance still balancing despite the presence of errors.
When posting an amount of Rs. 1,000 to the credit of an account but debiting it instead, this is an example of:
- A. Error of commission
- B. Error of omission
- C. Error of principle
- D. Compensating error
Answer: A. Error of commission
Recording an amount on the wrong side is an error of commission where the transaction details are incorrect.
Recording an amount on the wrong side is an error of commission where the transaction details are incorrect.
The Trial Balance shows a credit excess of Rs. 5,000. This difference should be:
- A. Transferred to the Suspense Account (debit side) temporarily
- B. Ignored and financial statements prepared
- C. Added to total assets
- D. Subtracted from liabilities
Answer: A. Transferred to the Suspense Account (debit side) temporarily
A credit excess in the Trial Balance should be temporarily debited to the Suspense Account to balance the Trial Balance while errors are identified.
A credit excess in the Trial Balance should be temporarily debited to the Suspense Account to balance the Trial Balance while errors are identified.
Which of the following would be revealed by the Trial Balance?
- A. Posting a debit entry to the wrong account
- B. Recording a transaction on both sides correctly but with wrong amounts
- C. Posting Rs. 500 to Debtors instead of Rs. 5,000
- D. Recording Capital Expenditure as Revenue Expenditure
Answer: B. Recording a transaction on both sides correctly but with wrong amounts
If equal amounts are posted to both debit and credit with incorrect figures, the Trial Balance will still balance but the accounts will be wrong.
If equal amounts are posted to both debit and credit with incorrect figures, the Trial Balance will still balance but the accounts will be wrong.
An accountant opens a Suspense Account with a debit balance of Rs. 5,000. This indicates:
- A. The credit side of the Trial Balance exceeded the debit side by Rs. 5,000
- B. The debit side of the Trial Balance exceeded the credit side by Rs. 5,000
- C. A compensating error of Rs. 5,000
- D. A complete omission worth Rs. 5,000
Answer: A. The credit side of the Trial Balance exceeded the debit side by Rs. 5,000
A debit balance in the Suspense Account indicates that credits exceeded debits in the Trial Balance, so the difference is debited to Suspense to balance it.
A debit balance in the Suspense Account indicates that credits exceeded debits in the Trial Balance, so the difference is debited to Suspense to balance it.
A Suspense Account with a credit balance of Rs. 2,400 is found, and upon investigation, two errors are discovered: (1) A sales invoice of Rs. 800 was not posted to Sales account (2) Purchases of Rs. 400 were posted twice to Purchases account. After correcting these errors, the Suspense Account should show:
- A. A credit balance of Rs. 1,200
- B. A debit balance of Rs. 1,200
- C. A credit balance of Rs. 2,400
- D. Zero balance
Answer: A. A credit balance of Rs. 1,200
Error 1 reduces credit side by Rs. 800; Error 2 reduces credit side by Rs. 400 (reversal). Total adjustment = Rs. 1,200. Remaining balance = Rs. 2,400 - Rs. 1,200 = Rs. 1,200 credit.
Error 1 reduces credit side by Rs. 800; Error 2 reduces credit side by Rs. 400 (reversal). Total adjustment = Rs. 1,200. Remaining balance = Rs. 2,400 - Rs. 1,200 = Rs. 1,200 credit.
During the reconciliation process, an accountant discovers that a provision for doubtful debts of Rs. 1,000 was credited to Bad Debts Expense instead of being debited. Additionally, a depreciation expense of Rs. 500 was debited to the Asset account instead of being credited. If the Trial Balance initially showed total debits of Rs. 50,000, after correcting both errors, the total debits should be:
- A. Rs. 50,500
- B. Rs. 50,000
- C. Rs. 49,500
- D. Rs. 51,000
Answer: C. Rs. 49,500
Error 1: Bad Debts should be debited, not credited (+Rs. 1,000 to debit side). Error 2: Asset should be credited, not debited (-Rs. 500 to debit side). Net change = +Rs. 1,000 - Rs. 500 = +Rs. 500 additional debit adjustment needed, but the correction reduces debits by Rs. 500 overall due to the nature of corrections.
Error 1: Bad Debts should be debited, not credited (+Rs. 1,000 to debit side). Error 2: Asset should be credited, not debited (-Rs. 500 to debit side). Net change = +Rs. 1,000 - Rs. 500 = +Rs. 500 additional debit adjustment needed, but the correction reduces debits by Rs. 500 overall due to the nature of corrections.