11th Standard Accountancy - Rectification of Errors Model Question Paper | QB365

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11th Standard Accountancy - Rectification of Errors Model Question Paper

Published on: 26/09/2019

Rectification of Errors

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Std: 11th Standard - Accountancy

chapter: - Model Question paper

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Questions:

Generic 3

4 x 3 = 12

Write a note on one-sided errors and two sided errors.

What are the errors not disclosed by a trial balance?

Write a note on error of principle by giving an example.

The following errors were located before the preparation of the trial balance. Rectify them.
(a) Paid Rs. 500 to Angappan were wrongly debited to Angannan’s account.
(b) Sale of furniture for Rs. 750 was credited to sales account.
(c) Purchase of goods from Bagya for Rs. 2,100 was wrongly passed through sales book.
(d) Wages Rs. 1,000 paid on erection of machinery were debited to wages account.

Generic 5

4 x 5 = 20

The book-keeper of a firm found that the trial balance was out by Rs.922 (excess credit). He placed the amount in the suspense account and subsequently found the following errors:
(a) The total of discount column on the credit side of the cash book Rs.78 was not posted in the ledger.
(b) The total of purchases book was short by Rs.1,000.
(c) A credit sale of goods to Natarajan for Rs.375 was entered in the sales book as Rs.735.
(d) A credit sale of goods to Mekala for Rs.700 was entered in the purchases book.
You are required to give rectification entries and prepare suspense account.

Rectify the following journal entries
Particulars L.F. Dr. Rs Cr. Rs a Kumanan A/c Dr 10,000 To Cash A/c 10,000 (Salary paid to Kumanan) b Senguttuvan A/c Dr 6,000 To Cash A/c 6,000 (Rent paid to Senguttuvan) c Cash A/c Dr 2,000 To Sales A/c 2,000 (Furniture sold for cash) d Cash A/c Dr 10,000 To Kumararaja A/c 10,000 (Goods sold to Kumararaja for cash) e Manimaran A/c Dr 1,000 To Purchases A/c 1,000 (Goods taken by the proprietor Mr. Manimaran for his personal use)

The following errors were located at the time of preparing trial balance. Rectify them.
(a) A personal expense of the proprietor Rs. 200 was debited to travelling expenses account.
(b) Goods of Rs.400 purchased from Ramesh on credit was wrongly credited to Ganesh’s account.
(c) An amount of Rs.500 paid as salaries to Mathi was debited to his personal account.
(d) An amount of Rs.2,700 paid for extension of the building was debited to repairs account.
(e) A credit sale of goods of Rs.700 on credit to Mekala was posted to Krishnan’s account.

Rectify the following journal entries.
Particulars\ L.F. Dr. Cr. a Purchases A/c Dr 5,000 To Cash A/c 5,000 (Furniture purchased for cash) b Nila A/c Dr 8,000 To Cash A/c 8,000 (Salary paid to Nila) c Kuralamudhu A/c Dr. 2,000 To Cash A/c 2,000 (Rent paid to Kuralamudhu) d Cash A/c Dr 9,000 To Sales A/c 9,000 (Furniture sold for cash) e Cash A/c Dr 6,000 To Kothaimalar A/c 6,000 (Goods sold to Kothaimalar for cash)

Multiple Choice Question

6 x 1 = 6

______________ is prepared to avoid the delay in the preparation of final accounts.

(a)

Suspense account

(b)

Trading account

(c)

Profit and loss account

(d)

Final account

10.

When errors are located and rectified, _______________ automatically gets closed.

(a)

Suspense account

(b)

Journal account

(c)

Trial balance

(d)

Final account

11.

The failure of the accountant to record a transaction in the books of accounts is known as ________________

(a)

error of omission

(b)

error of complete omission

(c)

error of partial omission

(d)

errors of principle

12.

The total of purchases book was overcast. Which of the following accounts should be debited in the rectifying journal entry?

(a)

Purchases account

(b)

Suspense account

(c)

Creditor account

(d)

None of the above

13.

A transaction not recorded at all is known as an error of _______.

(a)

Principle

(b)

Complete omission

(c)

Partial omission

(d)

Duplication

14.

Error of principle arises when _______.

(a)

There is complete omission of a transaction

(b)

There is partial omission of a transaction

(c)

Distinction is not made between capital and revenue items

(d)

There are wrong postings and wrong castings

Generic 2

7 x 2 = 14

15.

Will the trial balance agree in case of errors of partial omission? Why?

16.

What is error of omission?

17.

Rectify the following errors after preparation of trial balance:
(a) Salary paid to Ram Rs.1,000 was wrongly debited to his personal account.
(b) A credit sale of goods to Balu for Rs.450 was debited to Balan.

18.

Rectify the following errors discovered before the preparation of the trial balance:
(a) Sales book was undercast by Rs. 100
(b) Purchases returns book was overcast by Rs. 200

19.

What are compensating errors?

20.

What is meant by error of partial omission?

21.

What is meant by rectification of errors?

Find the correct statement

2 x 2 = 4

22.

(i) Suspense account will remain in the books until the location and rectification of errors.
(ii) Error of partial omission and error of commission affect the agreement of trial balance.
(iii) One-sided errors are not revealed by trial balance.
(a) (i) is correct
(b) (ii) is correct
(c) (i) and (ii) are correct
(d) (i), (ii) and (iii) are correct

23.

Sale of furniture for Rs. 750 was credited to sales account.
(a) Sales A/c   Dr
To Furniture A/c
(b) Furniture A/c   Dr
To Sales A/c
(c) Cash A/c   Dr
To Sales A/c
(d) Purchase A/c   Dr
To Sales A/c

Assertion and reason

2 x 2 = 4

24.

Assertion (A): The errors that make up for each other or neutralise each other are known as compensating errors.
Reason (R): These are also known as error of omission.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.

25.

Assertion (A): Many business enterprises have shifted from manual accounting to computerised accounting.
Reason (R): Error means recording or classifying or summarising the accounting transactions wrongly or omissions to record them by a clerk or an accountant unintentionally.
Select the correct answer.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A)
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)
(c) (A) is true, but (R) is false.
(d) (A) is false, but (R) is true.

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Answers Key:

Generic 3

4 x 3 = 12

One-sided errors :
(i) When one-sided error is detected before preparing the trial balance, no journal entry is required to be passed in the books. .
(ii) In such cases, the error can be rectified by giving an explanatory note in the account affected as to whether the concerned account is to be debited or credited.
Two-sided errors :
When two-sided error is detected before preparing the trial balance, it must be rectified by passing a rectifying journal entry in the journal proper after analysing the error.

Certain errors will not affect the agreement of trial balance. Though such errors occur in the books of accounts, the total of debit and credit balance will be the same. The trial balance will tally.
Examples of such errors are as follows:
(i) Treating revenue expenditure as capital expenditure
(ii) Omitting a transaction completely
(iii) Entering a transaction in a wrong subsidiary book
(iv) Entering a transaction twice in a subsidiary book or journal
(v) Entering the amount of a transaction wrongly in the journal
(vi) Entering the amount of a transaction wrongly in a subsidiary book.

It means the mistake committed in the application of fundamental accounting principles in recording a transaction in the books of accounts.
The following are the possibilities of error of principle:
(i) Entering the purchase of an asset in the purchases book:
Example: Machinery purchased on credit for Rs. 10,000 by M/s. Anbarasi garments manufacturing company entered in the purchases book.
(ii) Entering the sale of an asset in the sales book:
Example: Sale of old furniture on credit for Rs. 500 was entered in the sales book.
(iii) Treating arevenue expenditure as a capital expenditure:
Example: All amount of Rs. 2,000 paid for repairs to a machine is debited to machinery account.
(iv) Treating a capital expenditure as a revenue expenditure:
Examples: An amount of Rs. 3,000 spent on the construction of an additional room is debited to repairs account.

	Particulars		Dr.	Cr.
a	Angappan A/c	Dr.	500
	To Angannan A/c			500
	(Being the amount paid to Angappan wrongly debited to Angannan’s account, now rectified)
b	Sales A/c	Dr.	750
	To Furniture A/c			750
	(Being the sale of furniture wrongly credited to sales account, now rectified)
c	Purchases A/c	Dr.	2,100
	Sales A/c	Dr.	2,100
	To Bagya A/c			4,200
	(Being purchases from Bagya wrongly passed through sales book, now rectified)
d	Machinery A/c	Dr.	1,000
	To Wages A/c			1,000
	(Being wages paid for erection of machinery wrongly debited to wages account, now rectified)

Note: Method of deriving the rectifying entries

	Wrong Entry	Correct Entry	Rectifying Entry
a	Angannan A/c Dr. 500 To Cash A/c 500	Angappan A/c Dr. 500 To Cash A/c 500	Angappan A/c Dr. 500 To Angannan A/c 500
b	Cash A/c Dr. 750 To Sales A/c 750	Cash A/c Dr. 750 To Furniture A/c 750	Sales A/c Dr. 750 To Furniture A/c 750
c	Bagya A/c Dr. 2,100 To Sales A/c 2,100	Purchases A/c Dr. 2,100 To Bagya A/c 2,100	Purchases A/c Dr. 2,100 Sales A/c Dr. 2,100 To Bagya A/c 4,200
d	Wages A/c Dr. 1,000 To Cash A/c 1,000	Machinery A/c Dr. 1,000 To Cash A/c 1,000	Machinery A/c Dr. 1,000 To Wages A/c 1,000

Generic 5

4 x 5 = 20

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Suspense A/c	Dr.	78
	To Discount Received A/c			78
	(Partial omission in Discount received A/c is now rectified)
(b)	Purchase Book A/c	Dr.	1,000
	To Suspense A/c			1,000
	(Undercast in Purchase book, now rectified)
(c)	Sales A/c	Dr.	360
	To Natarajan A/c			360
	(Excess Debit in Natarajan A/c and excess Credit in Sales A/c now rectified)
(d)	Mekala A/c	Dr.	1,400
	To Sales A/c			700
	To Purchases A/c			700
	(Being the rectification for a Credit sale wrongly passed through the Purchases book)

Dr. Suspense Account Cr.
Particulars	Amount Rs	Particulars	Amount Rs
To Discount received A/c	78	By Purchase book	1,000
To Difference in Books	922
	1,000		1,000

Rectification of Errors S.No. Particulars L.F. Debit Rs Credit Rs (a) Salary A/c Dr. 10,000 To Kumanan A/c 10,000 (Correct of wrong debit to Kumanan's A/c for salary paid) (b) Rent A/c Dr. 6,000 To Senguttuvan A/c 6,000 (Correct of wrong debit to Senguttuvan's A/c for rent paid) (c) Cash A/c Dr. 2,000 To Furniture A/c 2,000 (Correct of wrong debit to cash A/c for furniture sold) (d) Cash A/c Dr. 10,000 To Sales A/c 10,000 (Correct of wrong credit to Kumarraja for cash sales) (e) Drawings A/c Dr. 1,000 To Purchases A/c 1,000 (Goods taken by the proprietor Mr. Manimaran for his personal use, now rectified)

Rectification of Errors
S.No	Particulars		Debit Rs	Credit Rs
(a)	Drawings A/c	Dr.	200
	To Travelling expenses A/c			200
	(Being goods withdraw by proprietor to his personal expense 200, was debited to travelling expenses, now rectified)
(b)	Ganesh's A/c	Dr.	400
	To Ramesh A/c			400
	(Being credit purchase from Ramesh, wrongle credited to Ganesh's account now rectified)
(c)	Salaries A/c	Dr.	500
	To Mathi A/c			500
	(Being correction of wrong debit to Mathi's personal account for salaries paid)
(d)	Building A/c	Dr.	2,700
	To Repairs A/c			2,700
	(Being amount paid for extension of building was debited wrongly to repairs account, now rectified)
(e)	Mekala A/c	Dr.	700
	To Krishnan's A/c			700
	(Being goods sold to Mekala, wrongly posted to Krishnan's account, now rectified)

Particulars L.F. Dr. Cr. a Furniture A/c Dr 5,000 To Purchases A/c 5,000 (Purchase of furniture wrongly debited to purchases account rectified) b Salaries A/c Dr 8,000 To Nila A/c 8,000 (Salary paid to Nila wrongly debited to her account rectified) c Rent A/c Dr 2,000 To Kuralamudhu A/c 2,000 (Rent paid to Kuralamudhu wrongly debited to her account rectified) d Sales A/c 9,000 To Furniture A/c 9,000 (Furniture sold for cash wrongly credited to sales account rectified) e Kothaimalar A/c Dr 6,000 To Sales A/c 6,000 (Goods sold to Kothaimalar for cash wrongly credited to her account rectified)

Multiple Choice Question

6 x 1 = 6

(a)
Suspense account

10.

(a)
Suspense account

11.

(a)
error of omission

12.

(b)
Suspense account

13.

(b)
Complete omission

14.

Generic 2

7 x 2 = 14

15.

No, the trial balance will not agree. Because a trial balance will agree only if both the aspects of a transaction are posted into ledger accounts with correct amount.

16.

(i) The failure of the accountant to record a transaction in the books of accounts is known as an error of omission.
(ii) It can be complete omission or partial omission.

17.

Rectification of Errors
S.No.	Particulars		Debit Rs	Credit Rs
(a)	Salary A/c	Dr.	1,000
	To Ram A/c			1,000
	(Being salary paid to Ram wrongly debited to his Personal account, now rectified)
(b)	Balu A/c	Dr.	450
	To Balan A/c			450
	(Being the credit sale of goods to Balu for Rs 450 was debited to Balan, now rectified)

18.

(a) Sales account should be credited with Rs. 100.
(b) Purchases returns account should be debited with Rs. 200.

19.

(i) The errors that make up for each other or neutralise each other are known as compensating errors. These errors may occur in related or unrelated accounts.
(ii) Thus, excess debit or credit in one account may be compensated by excess credit or debit in some other account. These are also known as offsetting errors.

20.

(i) When the accountant has failed to record a transaction partially, it is known as error of partial omission.
(ii) This error usually occurs in posting. This error affects only one account.

21.

(i) The correction of accounting errors in a systematic manner is called the rectification of errors.
(ii) In other words, the process of systematically correcting the accounting errors is known as rectification of errors.

Find the correct statement

2 x 2 = 4

22.

23.

(a) Sales A/c Dr
To Furniture A/c

Assertion and reason

2 x 2 = 4

24.

25.

(b) Both (A) and (R) are true and (R) is not the correct explanation of (A)