Q1. What are the classification of errors?
(i) Errors of Omission.
(ii) Errors of Commission.
(iii) Errors of Principle.
(iv) Compensating Errors.
Q2. What is meant by Error of Principle?
Ans. Error of Principle means recording a transaction in contravention of accounting principles.
Q3. Give one example of Error of Principle.
Ans. Recording freight on purchase of fixed asset as a revenue expenditure.
Q4. What is meant by Error of Omission?
Ans. Error of Omission means a transaction being omitted to be recorded completely or partially.
Q5. What is meant by Error of Complete Omission?
Ans. Error of Complete Omission means a transaction is not recorded in the books of accounts or if recorded has not been posted into Ledger Accounts.
Q6. What is meant by Error of Partial Omission?
Ans. Error of Partial Omission means a transaction being recorded partially and if recorded completely has been posted into Ledger Accounts partially.
Q7. In case of errors of partial omission, will the Trial Balance agree? Why?
Ans. No, the Trial Balance will not agree. Because a Trial Balance will agree only if both aspects of a transaction are posted into Ledger Accounts with correct amount.
Q8. What is meant by Errors of Commission?
Ans. Errors of Commission are those errors which arise due to wrong recording, wrong posting, wrong carrying forward, wrong casting, wrong balancing, etc.
Q9. Give two examples of Errors of Comission.
(i) Recording purchases of goods for Rs. 5,000 as Rs. 50,000.
(ii) Cash balance of Rs. 1,000 carried forward as Rs. 10,000.
Q10. What is meant by Compensating Error?
Ans. Compensating Error is the error the effect of which is nullified by another error of equal amount.
Q11. What is One-Sided Error?
Ans. One-Sided Errors are those errors which have occurred in one side ‘Debit or Credit’ of an account. Because of which Trial Balance will not agree.
Q12. What is Two-Sided Error?
Ans. Two-Sided Errors are those errors that have been committed on both sides, i.e. Debit and credit. Although error has been committed yet the Trial Balance will agree.
Q13. Give two examples of One-Sided Error.
(i) Depreciation on computers not posted to Depreciation A/c.
(ii) Purchase of stationery of Rs.500 posted twice to Stationery A/c.
Q14. Give two examples of Two-Sided Error.
(i) Machinery.purchased recorded in the Purchases Book.
(ii) Old furniture sold recorded as sales of goods.
Q15. Give one example of Compensating Error.
Ans. The total of Purchase Book is posted in the ledger as Rs. 10,000 in place of Rs. 1,00,000 and at the same time total of Sales Book is posted as Rs. 1,00,000 instead of Rs. 1,90,000. These two errors neutralise the effect of each other.
Q16. Give two examples of errors which are not disclosed by a Trial Balance in spite of it being agreed. Or Name two types of errors with example which do not affect the Trial Balance.
(i) Errors of Principle: Example—Recording of machinery purchased as purchases.
(ii) Errors of Complete Omission: Example Goods purchased from Sita Ram of Rs. 5,000 but not recorded in the books of accounts.
Q17. What do you mean by Suspense Account?
Ans. Suspense Account is an account in which the difference of Trial Balance is placed temporarily till the errors are located and rectified.
Q18. What is meant by a rectifying entry?
Ans. Rectifying entry means an entry passed to correct the error committed.
Q19. Name the error committed by violating the rule of Accounting.
Ans. Error of Principle.