Accounting Mcqs

Page No. 55

For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows: 1 March 31,2010 – ` 56,000 March 31, 2011 – ` 51,000 March 31, 2012 – ` 64,000 The entry on March 31, 2012 to rectify these omissions would include a


aCredit to wage expense for ` 64,000

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bDebit to wage expense for ` 64,000

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cDebit to wage expense for ` 51,000

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dDebit to wage expense for ` 13,000

✓


View Answer Debit to wage expense for ` 13,000

If goods worth 1,750 returned to a supplier is wrongly entered in sales return book as 1,570, then


aNet Profit will decrease by 3,140

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bGross Profit will increase by 3,320

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cGross Profit will decrease by 3,500

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dGross Profit will decrease by 3,320

✓


View Answer Gross Profit will decrease by 3,320

While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result


aPrevious year‘s profit is overstated and current year‘s profit is also overstated.

✖


bPrevious year‘s profit is understated and current year‘s profit is overstated.

✖


cPrevious year‘s profit is overstated and current year‘s profit is understated.

✓


dThere will be no impact on the profit of either the previous year or the current year.

✖


View Answer Previous year‘s profit is overstated and current year‘s profit is understated.

Which of the following statements is correct about Trial Balance?


aThe Trial Balance is prepared after preparing the Profit and Loss Account

✖


bThe Trial Balance shows only balances of Assets and Liabilities

✖


cThe Trial Balance shows only nominal account balances

✖


dThe Trial Balance has no statutory importance from the point of view of law

✓


View Answer The Trial Balance has no statutory importance from the point of view of law

The adjustment to be made for income received in advance is:


aAdd income received in advance to respective income and show it as a liability

✖


bDeduct income received in advance from respective income and show it as a liability

✓


cAdd income received in advance to respective income and show it as asset

✖


dDeduct income received in advance from respective income and show it as an asset in the Balance Sheet

✖


View Answer Deduct income received in advance from respective income and show it as a liability

Which of the following statements is true?


aIf a Trial Balance tallies, it always means that none of the transactions has been completely omitted

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bA Trial Balance will not tally if a transaction is omitted

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cA customer to whom goods have been sold on credit cannot avail himself of a cash discount

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dA credit balance in the Pass Book indicates excess of deposits over withdrawals

✓


View Answer A credit balance in the Pass Book indicates excess of deposits over withdrawals

Closing stock in the Trial Balance implies that______________?


aIt is already adjusted in the opening stock

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bIt is adjusted in the Purchase A/c

✓


cIt is adjusted in the Cost of Sale A/c

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dIt is adjusted in the Profit &Loss A/c

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View Answer It is adjusted in the Purchase A/c

Journal proper is meant for recording_____________?


aCredit purchase of fixed assets

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bReturn of goods

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cAll such transactions for which no special journal has been kept by the business

✓


dNone of these

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View Answer All such transactions for which no special journal has been kept by the business

Which of the following is true?


aError of casting affects personal accounts

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bOmission of a transaction from a subsidiary record affects only one account

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cError of carry forward affects two accounts

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dError of principle involves an incorrect allocation of expenditure or receipt between capital and revenue

✓


View Answer Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue

Which of the following statements is /are true?


aEntering wrong amount in the subsidiary book affects the agreement of the Trial Balance

✖


b Undercasting or overcastting of a subsidiary book is an example or error of commission

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cErrors of principle do not affect the agreement of Trial Balance

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dBoth B. and C. above

✓


View Answer Both B. and C. above

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