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AC C6 - Errors and Correction

Total questions: 20

Worksheet time: 10mins

Name
Class
Date
1.

A credit purchase of goods $1200 from Calvin trading was recorded in Clara trading account. Name the error.

a)

Error of commission

b)

Error of omission

c)

Error of principle

d)

Compensating error

2.

A cheque payment of $500 for rent was not recorded. Name the error.

a)

Error of commission

b)

Error of omission

c)

Error of principle

d)

Compensating error

3.

Both salaries expense and commission income were overstated by $900. State the correction of error.

a)

Dr Capital Cr salaries exp

b)

Dr salaries expense cr commission income

c)

Dr commission income Cr salaries expense

4.

When there is error with credit entry not equal to credit entry,

a)

trial balance will not agree

b)

trial balance will agree

c)

supense account will be appeared

d)

there is no suspense account

5.

A suspense account is used to rectify?

a)

Errors affecting trial balance agreement

b)

Errors not affecting trial balance agreement

c)

Both types of errors

d)

None of these

6.

A cash deposit made by business appears on the bank statement as _______ balance.

a)

Debit

b)

Credit

c)

Expenses

d)

Liabilities

7.

If the final balance in the bank statement is $3900 Cr, unpresented cheques equal $500 and outstanding deposits total $900, the final balance in the business's bank account is:

a)

$4300 Dr

b)

$4300 Cr

c)

$3500 Cr

d)

$3500 Dr

8.

What do we call a cheque that the bank refused to pay the payee because the drawer has insufficient funds in his current account?

a)

Stale cheque

b)

Dishonoured cheque

c)

Sad cheque

d)

Dubious cheque

9.

Which of the following is already recorded in the Cash at Bank account but not in the Bank Statement?

a)

Bank charges

b)

Dishonoured cheque

c)

Uncredited cheque

d)

Direct deposit

10.

what to be recorded for updating cash book? (more than 1 answer)

a)

bank charge

b)

bank interest

c)

bank error

d)

uncredited amount

e)

standing order

11.

Items in the cash book which do not appear on the bank statement are usually caused by _______________ differences.

a)

amount

b)

timing

c)

description

12.

The purchases account was added up too much by $ 100 and sales account also added up too much by $ 100. What kind of error is this?


a)

A. Commission

b)

B. Principle

c)

C. Omission

d)

D. Compensating

13.

Goods sold on credit to Saani had been debited to Soni’s account. What kind of error is this?

a)

A. Commission

b)

B. Principle

c)

C. Omission

d)

D. Transposition.

14.

Sale of machinery had been recorded in the sales account. What would be the entry to correct this error?

a)

A. Debit sales account and credit machinery account

b)

B. Debit machinery account and credit sales account

c)

C. Debit cash account and credit machinery account

d)

D. Debit machinery account and credit cash account

15.

Wages paid for the installation of new machinery debited to wages account. What kind of error is this?

a)

A. Omission

b)

B. Commission

c)

C. Principle

d)

D. Compensating

16.
What is the impact on profit for the year if income overstated?
a)
profit will be overstated
b)
profit will be understated
c)
no effect
17.

Both salaries expense and commission income were overstated by $900. State the correction of error.

a)

Dr Capital Cr salaries exp

b)

Dr salaries expense cr commission income

c)

Dr commission income Cr salaries expense

18.

A bank reconciliation statement is

a)

Part of the cash book

b)

Part of Bank account

c)

Part of financial statement

d)

None of the above

19.

Discrepancies between the Cash at Bank balance and the Bank Statement balance are due to:


(you may select more than 1 correct option)

a)

Errors by the bank

b)

Errors by the accountant

c)

Errors by the supplier

d)

Timing differences in the recording of the transactions

20.

A bank statement balance and a cash book balance do not agree.

Which items arise from timing differences?

1 bank charges

2 bank errors

3 uncredited deposits

4 unpresented cheques

a)

1 and 2 only

b)

1, 2, 3 and 4

c)

2, 3 and 4 only

d)

3 and 4 only