Month: March 2020

The journal is used to correct errors because . . .?

Select ONE answer:

1. it is faster to record the corrections in the Journal than in the ledger.
2. once entered in the Journal. there is no need to record the corrections in the ledger.
3. a narrative can be included in the Journal to explain the nature of the transaction and therefore explain the entries in the double-entry records.
4. it is easier to correct errors using the Journal than to correct them in the control accounts.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – All corrections, just like all transactions, ultimately have to be recorded in the ledger anyway.
2. Not correct – All corrections, just like all transactions, ultimately have to be recorded in the ledger anyway.
3. Correct
4. Not correct – Errors are not corrected in control accounts.

 

 

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If the cost of servicing a firm’s car was debited to a fixed asset account instead of being debited to the motor expenses account, then. . .?

Select ONE answer:

1. gross profit would be overstated.
2. net profit would be understated.
3. expenses would be understated.
4. net assets would be understated.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – Gross profit would not be affected.
2. Not correct – Net profit would be overstated.
3. Correct – The total of expenses would be understated because the £200 motor expenses would be omitted from the list of expenses.
4. Not correct – Net assets would be overstated.

 

 

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Which of the following is an error of principle?

Select ONE answer:

1. A sales invoice for an incorrect amount was correctly entered in the sales journal.
2. Stock was issued but an accompanying invoice was not.
3. The wrong percentage rate was used when calculating depreciation.
4. An item was entered in the wrong class of account.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – The incorrect sales invoice will result in the total of the sales journal being incorrect. Therefore, an incorrect figure will be posted to the ledger. So long as this (incorrect) figure is posted to the correct sides of the correct accounts (the debit side of the debtors control account and the credit side of the sales account) this will be an error of original entry.
2. Not correct – This transaction will not be recorded because an invoice was not issued. This will, therefore, be an error of omission.
3. Not correct – Assuming that the double-entry for the (incorrect) depreciation charge is correct, this will be an error of original entry.
4. Correct

 

 

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Which of the following errors, on its own, could account for the total of the balances in a firm’s debtors ledger being £800 more than the debit balance on its debtors control account?

Select ONE answer:

1. Discounts allowed totalling £800 have been omitted from the nominal (general) ledger but correctly accounted for in the debtors’ ledger.
2. One debtors’ ledger account with a credit balance of £800 has been treated as a debit balance when totalling the balances in the debtors’ ledger.
3. The total amount received from debtors, as shown in the cash book (or cash receipts book) is overstated by £800.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – Discounts allowed being omitted from the nominal (general) ledger but correctly accounted for in the debtors ledger would result in the balance on the debtors control account being greater than the total of the list of debtors balances.
2. Not correct – A credit balance on a debtors ledger account being treated as a debit balance would result in the balance on the debtors control account being greater than the total of the list of debtors balances.
3. Correct
4. Not correct

 

 

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The balance of £37,564 in a firm’s purchases ledger control recount did not agree with the total of the creditors’ balances listed as at the same date.

Upon investigation, the following errors were discovered:

• A refund of £140 received from a credit supplier because of an overpayment had been posted to the wrong side of the control account.
• Returns outwards of £310 had also been posted to the wrong side of the control account.
• The list of balances had been undercast by £200.
• Discounts received of £276 were not recorded in the control account.

The correct credit balance on the purchases ledger control recount is?

Select ONE answer:

1. £30,030
2. £39,060
3. £39,150
4. £39,210

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – The undercasting of the list of balances does not affect the control account. £37,564 + (£140 x 2) – (£310 x 2) – £276 = £36,948
2. Not correct
3. Not correct
4. Not correct

 

 

This work is licensed under a Creative Commons Attribution 4.0 International License.