International Commerce Olympiad

1. ₹ 10,000 received from Apoorva is credited in the account of Prachi. It is an error of

(a) Principle (b) Omission

Ans: (c) Commission

2. Which item shows a debit balance in the Trial Balance?

(a)Purchase Return (b) Salary outstanding

Ans: (d) ) Prepaid Expense

3. Which of the following errors is revealed by the Trial Balance:

(a)Wrong amount entered into the book of original entry

(b)Wrong amount posted in the ledger Account

(c)Complete omission of an entry from the books of original entry

(d)When accounting principle is violated while recording a transaction in the books of Account

Ans: (b) Wrong amount posted in the ledger Account

4. Which of the following is not an error of commission:

(a)A sale of ₹ 560 not recorded in Books at all.

(b)Rent paid to landlord was posted to Landlord’s Account.

(c)A purchase of ₹ 840 was wrongly posted, to sales A/c

(d) Instead of crediting Shyam credited the other creditor Sham.

Ans: (a) A sale of ₹ 560 not recorded in Books at all

5. The goods for ₹ 900 sold, but the amount was entered in the sales account as ₹ 1,080. On rectification, suspense account will be

(a)Credited by ₹ 180 (b) Debited by ₹ 180

Ans: (a) Credited by ₹ 180

6. Which of the following is the error of principle?

(a)The purchase book was overcastted by ₹ 500

(b)Credit sale to Arun ₹ 700 recorded as purchase from Arun

(c)Goods returned to Charu ₹ 4,000, posted in Chinoo’s A/c

(d)Wages paid for installation of machinery debited to wages account.

Ans: (d) Wages paid for installation of machinery debited to wages account

7. An amount of ₹ 6,000 due from Abhimanyu, which had been written off as a bad debt in previous year, was unexpectedly recovered and had been posted to the personal account. The rectifying entry shall be

(a)Debit Abhimanyu with ₹ 6,000 and credit Suspense A/c with ₹ 6,000

(b)Debit Suspense A/c with ₹ 6,000 and credit Bad Debts Recovered A/c

₹ 6,000

(c)No entry to be passed

(d)Debit Abhimanyu with ₹ 6,000 and credit Bad Debts Recovered A/c

Ans: (d) Debit Abhimanyu with ₹ 6,000 and credit Bad Debts Recovered A/c

8. A machine is purchased for ₹ 10,000 which was wrongly recorded in purchase account. Due to this error .........

(a)Trial balance will show difference of ₹ 10,000

(b)Trial balance will not show any difference

(c)Trial balance will show the difference of ₹ 20,000

(d)Trial balance will show a difference of ₹ 5,000

Ans: (b) Trial balance will not show any difference

9. Sales to Mr. Gaurav of ₹ 3,000 on credit was recorded twice in the sales

book. The rectification entry will be .........

(a)Mr.Gaurav will be credited, sales will be debited

(b)Mr.Gaurav will be debited, sales will be credited

(c)Sales account will be credited only

(d)No entry will be passed for rectification

Ans: (a) Mr.Gaurav will be credited, sales will be debited

10. ‘Goods returned to Krishna of ₹ 530 was recorded in the Purchase Book’

Which is the rectifying entry for the same

(a)Krishna Dr. ₹ 1,060

To Purchase A/c ₹ 530

To Purchase Return A/c ₹ 530

(b) Suspense Account: Dr. ₹ 1,060

To Purchase A/c ₹ 530

To Purchase Return A/c ₹ 530

To Purchase A/c ₹ 530

(d) Suspense A/c: Dr. ₹ 530

To Krishna ₹ 530

Ans: (a) Krishna Dr. ₹ 1,060

To Purchase A/c ₹ 530

To Purchase Return A/c ₹ 530

11. ‘Sale of old machinery of ₹ 25,000 has been credited to Sales A/c ₹ 2,500’ what is the rectifying entry?

(a) Sales A/c Dr. ₹ 2,500

Suspense A/c Dr. ₹ 22,500

To Machinery A/c ₹ 25,000

(b) Sales A/c Dr. ₹ 25,000

To Old Machinery A/c ₹ 2,500

To Suspense A/c ₹ 22,500

Suspense A/c Dr. ₹ 22,500

To Machinery A/c ₹ 25,000

(d) Cash A/c Dr. ₹ 25,000

To Machinery A/c ₹ 2,500

To Sales A/c ₹ 22,500

Ans: (a) Sales A/c Dr. ₹ 2,500

Suspense A/c Dr. ₹ 22,500

To Machinery A/c ₹ 25,000

12. ‘Goods of the value of ₹ 2,000 returned by Verma were entered in the Sales Day Book and posted there from to the debit of his account’. To rectify this error Verma’s Account would be:

(a)Debited by ₹ 4,000 (b) Credited by ₹ 2,000

Ans: (c) Credited by ₹ 4,000

13. Which is the most appropriate objective of opening suspense Account?

(a)To tally the Trial Balance.

(b)To avoid the delay in preparation of financial statements.

(c)To rectify the errors of principle.

(d)To rectify the compensating errors.

Ans: (b) To avoid the delay in preparation of financial statements

14. ₹ 800 received from Ram has been credited to Ramesh. This error is:

(a)Compensating (b) Error of commission

Ans: (b) Error of commission

15. A tallied Trial Balance will not reveal :

(a)Error due to wrong balancing of an account

(b)Error due to wrong carrying forward of balance of an account

(d)Compensating error

Ans: (d) Compensating error

16. A trial balance is prepared from:

(a)Ledger (b) Subsidiary Books

Ans: (d) Ledger and Cash Book

17. Rent paid to Landlord Mr. Shyam ₹ 70 has been credited to Rent account for

₹ 700. In the rectifying entry:

(a)Shyam’s account will be debited by ₹ 700

(b)Rent account will be debited by ₹ 630

(c)Suspense account will be debited by ₹ 770

(d)Rent account will be debited by ₹ 770

Ans: (d) Rent account will be debited by ₹ 770

18. Cash sales of ₹ 2,000 was correctly recorded in cash book but posted as ₹

200. The rectifying entry will be:

(a) Cash A/c Dr. 2,200

2,200

b) Suspense A/c Dr. 1,800

To Sales 1,800

(d) Sales Dr. 1,800

To cash 1,800

Ans: (b) Suspense A/c Dr. 1,800

To Sales 1,800

19. When the total of trial balance is not reconciled, the account opened at this juncture is:

(a)Trading Account (b) Suspense Account

Ans: (b) ) Suspense Account

20. Which type of error occurs when credit sales is wrongly recorded in Purchase Day Book?

(a)Error of Omission (b) Error of Commission

Ans: (b) Error of Commission

21. Which of the following error will affect the total of trial balance?

(a)Wrong totaling of a subsidiary book

(b)Omission of a transaction in the books

(c)Writing wrong amount in the subsidiary books

(d)Posting correct amount on correct side but in wrong account

Ans: (a) )Wrong totaling of a subsidiary book

22. Which of the following is the error of principle?

(a)Credit sale to Ramesh ₹ 500 recorded as purchase from Mahesh

(b)Purchase Book over castted by ₹ 5000

(c)Repair of old machinery debited to Machinery A/c

(d)Goods returned to Shaym, shown as returned from Shyam

Ans: (c) Repair of old machinery debited to Machinery A/c

23. Creditor of ₹ 50,000 were paid at a discount of 4% through cheque, but full amount was credited in bank column of cash book. What type of error is this?

(a)Error of Principle (b) Partial Omission

Ans: (c) Error of Commission

24. Cash sales to Naman of ₹ 20,000 was credited as commission received in

Cash Account. What wrong entry has been passed in the books of the firm?

(a)Cash A/c Dr. 20,000

To Naman A/c 20,000

(b)Naman A/c Dr. 20,000

To Cash A/c 20,000

(c)Cash A/c Dr. 20,000

To Commission Received 20,000

(d)Commission Received A/c Dr. 20,000

To Naman A/c 20,000

Ans: (c) Cash A/c Dr. 20,000

To Commission Received 20,000

25. A credit sale to Ram ₹ 2,800 posted to credit side of his account as ₹ 8,200.

Now at the time of rectification Ram account will be:

(a)Debited by ₹ 2,800 (b) Debited by ₹ 11,000

Ans: (b) Debited by ₹ 11,000

26. Total of purchases return book is overcast by ₹ 5,600 and sales return book is also over cast by ₹ 5,600. These two mistake are example of:

(a)Errors of Omission (b) Errors of commission

Ans: (d) Compensating Errors

27. The objective of preparing Trial Balance is:

(a)To ascertain the Arithmetical Accuracy of ledger accounts

(b)To help in locating the errors

(c)To classify each account

(d)Both (a) and (b)

Ans: (d) Both (a) and (b)

28. A sale of ₹ 200 made to Mr. Ghanshyam was entered in the sales day book and posted to the debit of Mr. Radheyshyam as ₹ 20. What should have been the correct entry?

(a)Mr. Ghanshayam Dr. 200

To Mr. Radheyshyam 200

(b)Mr. Ghanshayam 200

To Mr. Radheysham 20

To Suspense Account 180

To Mr. Radheyshyam 20

To sales 180

(d) Mr. Ghanshyam

To Sales Dr. 200

200]

Ans; (b) Mr. Ghanshayam 200

To Mr. Radheysham 20

To Suspense Account 180

29. If a purchase return of ₹ 1,000 has been wrongly posted to the debit of the sales return A/c but has been correctly entered in the supplier account. It will affect the Trial Balance as

(a)The Debit side of the Trial balance will be ₹ 2,000 more than the credit side.

(b)The Credit side of the trail balance will be ₹ 2,000 more than the debit side.

(c)Trail Balance would show ₹ 1,000 more on the debit side.

(d)Trail Balance would show the credit side to be ₹ 1,000 more than the debit.

Ans: (a) The Debit side of the Trial balance will be ₹ 2,000 more than the credit side

30. Sales to Heena ₹ 143 was posted to Meena as ₹ 143.

(a)Error of Omission (b) Error of Principle

Ans: (d) ) Error of Commission

31. A credit sale of old furniture to Radha for ₹ 2,000 was entered into sales book for ₹ 20,000. While rectifying the error, Radha account will be credited by:

(a) ₹ 20,000 (b) ₹ 18,000

Ans: (b) ₹ 18,000

32. Return of goods amounting to ₹ 2,500 by Mr. Mohan was entered into the purchase return book. While rectifying the error Mohan’s account will be:

(a)Credited by ₹ 2,500 (b) Credited by ₹ 5,000

Ans: (b) Credited by ₹ 5,000

33. Which of the following is not an error of principle?

(a)Sale of machinery for ₹ 10,000 credited to sales account

(b)Freight paid for bringing a new machinery posted to freight A/c

(c)Cash received from Mohan posted to Sohan’s account

(d)Building purchased debited to purchase account

Ans: (c) )Cash received from Mohan posted to Sohan’s account

34. An amount of ₹ 30,000 paid to Rajesh has been posted to debit of Rakesh as

₹ 3,000. This transaction will result in:

(a)Trial Balance debit side short by ₹ 33,000

(b)Trial Balance credit side short by ₹ 27,000.

(c)Trial balance debit side short by ₹ 27,000

(d)No effect on Trial balance

Ans: (c)Trial balance debit side short by ₹ 27,000

35. Bank overdraft will be shown:

(a)Under Debit balances of Trial Balance

(b)Under Credit balances of Trial Balance

(c)As Deductions from Bank Balance

(d)Only in ledger accounts

Ans: (b) Under Credit balances of Trial Balance

36. A Suspense A/c facilitates the preparation of (i) even when the

(ii) has not tallied.

(a) (i) Ledger (ii) Trial Balance

(b) (i) Financial Statement (ii) Trial Balance

(d) (i) Journal (ii) Trial Balance

Ans: (b) i) Financial Statement (ii) Trial Balance

37. Purchased goods from Gopal for ₹ 3600 but was recorded as ₹ 6300 to the debit of Gopal. In the rectifying entry Gopal’s A/c will be credited with .........

(a) ₹ 3,600 (b) ₹ 6,300

Ans: (c) ₹ 9,900

38. Bill received from Mr. Anup for repair to furniture of ₹ 300 and new furniture supplied for ₹ 1,000 was recorded in the purchase book as ₹ 1,100/-

(a) Furniture A/c Dr. 1300

To purchase 1100

To Mr. Anup 200

(b) Repair A/c Dr. 300

Furniture A/c Dr. 1100

To Purchase A/c 1400

Furniture A/c Dr. 1000

To Purchase A/c 1100

To Mr. Anup 200

(d) Furniture A/c Dr. 1300

To Purchase A/c Dr. 1300

Ans:(c) Repair A/c Dr. 300

Furniture A/c Dr. 1000

To Purchase A/c 1100

To Mr. Anup 200