Which of the following is not correct about Errors?

Related Mcqs:

1. A few errors committed in Ahhiwalia’s books of account are given below. State which errors would affect the Trial Balance.

   (a). Sales of `950 to Ram completely omitted from books of account
   (b). Purchases of `720 from Shyam entered in the purchases journal as `700
   (c). Purchases Journal is overcast by `1,000
   (d). Sales returns journal is undercast by `200
   (e) Amount paid to Agarwal wrongly posted to the debit to Mittal’s account
   (f) Bank overdraft shown under debit column in the Trial Balance
   (g) Sales of `500 to Sadiq entered in sales journal as sales to Mushtaq
   (h) Wages paid for installation of machinery debited to wages account

   A. a, c and g
   B. c, d and f
   C. c, d, e and h
   D. c, d, f and h

2. Which of the following errors is an error of omission?

   A. Sale of ` 100 was recorded in the Purchases Journal
   B. Wages paid to Mohan have been debited to his account
   C. The total of the sales journal has not been posted to the Sales Account
   D. Repairs to buildings have been debited to buildings account

3. Which of the following errors affects the agreement of a Trial Balance?

   A. Mistake in balancing an account
   B. Omitting to record a transaction entirely in the subsidiary books
   C. Recording of a wrong entry in the subsidiary books
   D. Posting an entry on the correct side but in the wrong account

4. On scrutiny of a firm‘s books of accounts, it was observed that the following errors have occurred in the previous years but have not yet been rectified.

   i. Depreciation for 2011-2012- 7,000 understated
   ii. Accrued expenses as at March 31, 2013 – 10,000 understated
   The impact of this on the reported net income for the year ending March 31, 2013 is

   A. 7,000 Overstated
   B. 10,000 Overstated
   C. 17,000 Understated
   D. 17,000 Overstated

5. If debit balances = credit balances, trial balance only shows or check the ____________ and it does not indicate that no errors were made during recording and posting.

   A. Arithmetic accuracy
   B. Errors of commission
   C. Omissions of economic events
   D. Understatements of balances

6. The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by

   A. 17,000 (overstated.
   B. 12,000 (understated.
   C. 7,000 (overstated.
   D. 7,000 (understated.

7. Which of these errors affect only one account?

   A. Errors of casting
   B. Errors of carry forward
   C. Errors of posting
   D. All the three

8. Which of these errors affect two or more accounts

   A. Errors of complete omission
   B. Errors of principle
   C. Errors of posting to wrong account
   D. All the three

9. Which of the following entries is correct in respect of reserve for discounts on accounts payable?

   A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
   B. Debit Accounts Payable A/c and Credit P&L A/c
   C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
   D. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

10. Which of the following equations is correct?

    A. Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock
    B. Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening Stock
    C. Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales
    D. Gross Profit – Opening Stock + Direct expenses + Purchases +Closing stock = Sales