Higher Order Thinking Skills (HOTS) Questions - Rectification of Errors Commerce Notes | EduRev

Crash Course of Accountancy - Class 11

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Commerce : Higher Order Thinking Skills (HOTS) Questions - Rectification of Errors Commerce Notes | EduRev

The document Higher Order Thinking Skills (HOTS) Questions - Rectification of Errors Commerce Notes | EduRev is a part of the Commerce Course Crash Course of Accountancy - Class 11.
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Q1. Which of the following are not Errors of Principle and why?

(i) Vehicle expenses entered in Vehicles Account

(ii) Purchase of machinery entered in Purchases Account

(iii) Sales of Rs. 2,500 to Bishan completely omitted from books

(iv) Sales to A. Kumar entered in A. Singh’s Account.

Ans. (iii) and (iv) are not errors of principle because, (iii) has not been recorded in the books thus, is an error of omission and (iv) has been recorded in a wrong account with the correct amount.


Q2. Which of these errors would be disclosed by the Trial Balance and why;

(i) Cheque of Rs. 9,500 from Vikas entered in Vikash’s Account as Rs. 5,900?

(ii) Selling expenses have been debited to Sales Account?

(iii) Credit sales of Rs. 3,000 entered in both the accounts as Rs. 300?

(iv) A purchase of Rs. 2,500 was omitted entirely from the books?

Ans. (i) Because wrong amount has been entered although in the correct account.


Q3. Goods were sold to X for Rs. 4,000 and to Y for Rs. 3,000. The transactions were recorded properly in the Sales Book, but Rs. 3,000 was posted to X, while Rs. 4,000 was posted to Y. Identify the type of error.

Ans. Compensating Error.


Q4. Sale of old furniture was credited to Sales Account, is it en error?

Ans. It is an error. Sale of old furniture should be credited to Furniture Account.


Q5. Why is a Compensating Error not disclosed by the Trial Balance?

Ans. A Compensating Error is not disclosed by the Trial Balance as one error is nullified by another error.


Q6. Wages paid to a worker for making additions to machinery amounting to Rs.5,000 were debited to the Wages Account. Identify the type of error.

Ans. Error of Principle.


Q7. If a Trial Balance does not agree, the difference must be entered in

(i) the Profit and Loss Account,

(ii) a Suspense Account,

(iii) a Nominal Account and

(iv) the Capital Account. Give reasons.

Ans. (ii) A Suspense Account. Because the difference when located will be debited or credited to Suspense Account which ultimately should become nil.


Q8. Mr. A, sole trader, had prepared his Trial Balance on 31st March, 2015, and found that it was not tallying even after taking all the reasonable steps to locate the errors. What step should he take to proceed further?

Ans. He should open Suspense Account and transfer the difference in the Trial Balance on the debit side of the Suspense Account (if the credit side of the Trial Balance exceeds the debit side) or on the credit side of the Suspense Account (if the debit side of the Trial Balance exceeds the credit side).


Q9. A transaction is recorded in wrong book of original entry with wrong amount will it affect the Trial Balance? Give reason.

Ans. No. Reason: Error of Recording has the same effect on both the Debit and Credit aspects of a transaction.


Q10. A transaction is recorded correctly in Journal Proper but not posted in the ledger at all, will it affect the Trial Balance? Give reason.

Ans. No. Reason: Such errors of posting has the same effect on both the Debit and Credit aspects of a transaction as posting has not been done in both the accounts.


Q11. What does the Balance of Suspense Account indicate? How is the balance of Suspense Account treated?

Ans. Balance of Suspense Account shows the net effect of errors which are still to be located and rectified. It will be shown in assets side (in case of debit balance) or on the liabilities side (in case of credit balance) of the Balance Sheet.

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