Chapter MCQ Test 2 — Trial Balance and Rectification of Errors
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
Repairs to machinery Rs 4,000 are debited to the Machinery Account. This error:
Is an error of principle and will NOT affect the trial balance
Is omission and breaks the TB
Is compensating
Doubles the credit side
Explanation: A revenue expense (repairs) wrongly capitalised is an error of principle; both debit and credit are equal, so the TB still tallies.
Question 2 of 10
The purchases book is overcast by Rs 1,000 and the sales book is overcast by Rs 1,000. The net effect on the trial balance is:
It still tallies — the errors compensate
Debit short by 2,000
Credit short by 1,000
It cannot be prepared
Explanation: An equal overcast on a debit-type and a credit-type total cancel out — a compensating error that leaves the TB tallied.
Question 3 of 10
Goods sold to A Rs 700 were recorded in the sales book as Rs 7,000. This error is one of:
Commission (wrong amount in the original entry) — TB still tallies
Principle
Complete omission
Compensation
Explanation: A wrong figure entered in the book of original entry is an error of commission; since both accounts get the same wrong amount, the TB still agrees.
Question 4 of 10
Salary paid Rs 5,000 was posted to the Salary Account as Rs 500 (cash credited correctly Rs 5,000). The trial balance will be:
Out — debit side short by Rs 4,500
Tallied
Out — credit short by 500
Doubled
Explanation: Only the debit posting is wrong (under by 4,500), so the debit column falls short by Rs 4,500.
Question 5 of 10
A trial balance shows the credit side exceeding the debit side by Rs 200. To open the Suspense Account you:
Debit Suspense A/c by Rs 200
Credit Suspense A/c by Rs 200
Ignore it
Add 200 to capital
Explanation: The debit side is short, so the Suspense Account is debited with the difference to make the TB tally temporarily.
Question 6 of 10
Which combination of errors would leave a trial balance perfectly tallied yet the books wrong?
An error of principle plus a compensating error
A wrong column total alone
A one-sided posting alone
A partial omission alone
Explanation: Both errors of principle and compensating errors keep debits equal to credits, so the TB tallies though the accounts are wrong.
Question 7 of 10
Rent paid Rs 1,200 was completely omitted from the books. To rectify before final accounts you:
Pass: Rent A/c Dr 1,200 / To Cash A/c 1,200
Only debit Rent
Use the Suspense Account
Erase a page
Explanation: A complete omission is corrected by recording the full original entry now; no Suspense is needed (it never affected the TB).
Question 8 of 10
Why can a one-sided error be rectified THROUGH the Suspense Account but a two-sided error cannot?
Only one-sided errors create the TB difference parked in Suspense
Two-sided errors are illegal
Suspense holds profit
They are the same
Explanation: The Suspense Account exists only to hold the TB difference, which is caused by one-sided errors; two-sided errors never created that difference.
Question 9 of 10
After locating all one-sided errors, a firm's Suspense Account still shows a Rs 50 debit balance. This means:
At least one error remains undetected
The books are perfect
Profit increased by 50
Capital fell by 50
Explanation: The Suspense Account only closes to nil when every TB-affecting error is found; a leftover balance signals an undiscovered error.
Question 10 of 10
A cash sale Rs 3,000 was credited to Sales but the cash debit was omitted. The trial balance and remedy are:
Debit side short by 3,000; debit Cash and credit Suspense to rectify
Tallied; no action
Credit short by 3,000
Pass an error of principle entry
Explanation: Only the debit (Cash) is missing, so the debit column is short by 3,000; rectify by debiting Cash and crediting the Suspense Account.