CIE Accounting Paper-2: Specimen Questions with Answers 8 - 10 of 103

Passage

Mr. Tendulkar’s trial balance showed a suspense A/C of £ 32600 on the debit side. On rechecking the books, the following errors were discovered:

(i) An amount of £ 10000 received from Mr. Ganguly was posted to the debit side of Mr. Ashwin as £ 12000.

(ii) Salary paid to driver £4000 was debited to his personal A/C as £2400

(iii) Drawings of £2000 was credited to sales A/C as £3200

(iv) An amount of £6000 accounting for depreciation on car was posted as £600

(v) Sale of an old bat £20000 was credited to sales A/C as £12000

Question number: 8 (3 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

State the basis on which Mr. Tendulkar classifies the above said errors?

Explanation

Mr. Tendulkar classifies the above errors as follows:

(i) Error of Commission

(ii) Error of Omission (Partial)

(iii) Error of Principle

(iv) Error of Commission

(v) Error of Omission (Partial)

Question number: 9 (4 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

What are the types of errors that usually occur in accounting?

Explanation

The errors can be classified into 4 types

  • Error of Commission
  • Error of omission
  • Error of complete omission
  • Error of partial omission
  • Error of Principle
  • Compensating Errors

Question number: 10 (5 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Does Mr. Tendulkar’s Trial balance tally after rectifying the above said errors If not what is done with the balance of suspense A/C?

Explanation

No, Mr. Tendulkar’s trial balance does not tally even after the rectification of the discovered errors. There still exists a debit balance in the suspense A/C of £ 20400. This is because not all the errors have been detected. This debit amount will be carried forward to the next year and will be eliminated as and when other errors are identified.

Suspense A/C in the books of Mr. Tendulkar

shows Suspense A/C in the books of Mr. Tendulkar

Date

Particulars

J. F

Amount

£

Date

Particulars

J. F

Amount

£

To Ashwin A/C

2000

By Balance B/D

32600

To Car A/C

5400

By Sales A/C

3200

To Sales A/C

8000

To Balance C/D

20400

35800

35800

By Balance B/D

20400