Important Questions for CBSE Class 11 Accountancy Chapter 6 - Trial Balance and Rectification of Errors

A. Very Short Answer Questions – 1 Mark

1. Define trial balance?

Ans: A trial balance statement is a statement that balances the debt and credit from a ledger account.

2. When is a trial balance prepared?

Ans: At the end of each fiscal year, a trial balance is routinely prepared.

3. If the ledger account has a debit balance, where it will be placed in the trial balance?

Ans: The debit side of the trial balance is where debit sums are entered.

4. True or false

i. If the trial balance agrees, it implies that the book has no error.

Ans: The book may include two-sided errors. As a result, this sentence is false.

ii. Trial balance is a statement.

Ans: Trial balance is a statement. As a result, this sentence is true.

iii. A Trial balance is prepared after recording transactions in subsidiary books.

Ans: A Trial balance is prepared after posting to the ledger is complete and accounts have been balanced. As a result, this sentence is False

iv. Cash received from Suresh posted to Rajesh is not an accounting error.

Ans: It is not an accounting oversight that Suresh's cash was posted to Rajesh. As a result, this sentence is false.

5. When suspense account is dispose ?

Ans: The suspense account is closed after all account errors have been corrected.

B. Short Answer Questions – 2 marks

1. When a trial balance is prepared?

Ans: Trial balances are typically created at the end of a fiscal year, but they can also be prepared quarterly, monthly, or half-yearly.

2. Name the four types of errors.

Ans: The following are four types of errors:

1. Errors of Commission

2. Errors of Omission

3. Errors of Principle

4. Compensating Errors

3. Name the methods of preparation of trial balance.

Ans: There are three different ways to prepare trial balance:

1. Total method

2. Balance method

3. Total-cum-Balance method

4. Define suspense account.

Ans: Transactions are temporarily entered in this account before being allocated to its final account. This account is closed after all account errors have been corrected.

5. What do you understand by agreed trial balance?

Ans: The financials  are arithmetically correct, according to an agreed-upon trial balance report. However, it will not be evident whether or not every transaction in the diary or ledger was accurately recorded.

C. Short Answer Questions – 3 Marks

1. What are the objectives of preparing a trial balance?

Ans: The following are the three main goals of trial balance preparation:

• Verify that the ledger account is arithmetically correct.

• It aids in the detection of account mistakes.

• It aids in the preparation of the firm's final account.

2. How rectification of errors is done.

Ans: If the error affects just one account, it can be corrected either by creating a journal entry or by providing an explanatory note, however if the error affects many accounts, it can only be corrected by submitting a journal entry.

3. What is the purpose of suspense accounts?

Ans: Even if the trial balance does not match the ledger, the suspense account aids in the preparation of the company's financial statement. They are temporary accounts since they are prepared for a limited length of time and for a specific occasion.

4. What is the process of preparing trial balance?

Ans: The following is the procedure for preparing trial balance:

• Determine the balance of each ledger account. 

• Enter the balances of all debit and credit accounts in the appropriate columns.

• Add up the amounts on both the debit and credit sides.

• Balance the trial balance on the debit and credit sides.

5. What are the significance of agreement of trial balance?

Ans: The trial balance should balance, meaning the credit and debt sides should be equal. It will demonstrate that transaction inputs are correct and ledger calculations are arithmetically correct. It does not, however, prove that the transactions were accurately recorded.

D. Long Answer Questions - 5 Marks

1. Rectify the following errors in journal entry:

Cash sales Rs. 12,000

i) Were posted as 5,000 in sales account.

ii) Were posted to purchase account.

iii) Were not posted to sales account

Ans:

2. What are the ways of locating accounting errors by an accountant?

Ans: An accountant's procedure for discovering accounting problems is as follows:

i. Determine whether the totals on both the debit and credit sides are equal.

ii.The ledger account balance should be compared to the trial balance balance.

iii. Compare the total of the debtor's and creditor's accounts to the trial balance and balance them.

iv. Compare the sum of the journal entry book to the ledger.

v. Double-check that all transactions are correctly and accurately recorded in the journal entry book.

vi.Compare the current year's trial balance to the previous year's trial balance prior year's trial balance to see whether any figures are incorrect. Omitted

3. Explain the Various classifications of errors:

Ans:  The Various classifications of errors are explained below:

i. Commission errors: If transactions are recorded incorrectly, transaction totaling is incorrect, transactions are casted incorrectly, or transaction balancing is incorrect.

ii. Omission Inaccuracies: Omission of recording can result in errors in an account; these omissions in transactions might affect the account totally or partially.

iii. Principle Errors: Misplacement of payments and receipts between revenue and capital receipts and revenue and capital expenditure causes errors.

iv. Compensating errors: When two or more errors are reported in such a way that the effect of both is negated.

4. Explain the different methods of preparation of trial balance.

Ans:  A trial balance can be prepared in one of three ways:

i. Totals method: On the same side of the trial balance, the totals of each side as debit and credit of the ledger are indicated. As a result, the debit and credit sides of the trial balance must be balanced.

ii. Account balance: The credit and debit sides of the trial balance reflect the balances of all ledger accounts.

iii. Total-cumulative-balance account: This method combines the total and balance methods. This approach creates four columns, two of which contain debit and credit from the total method while the other two columns contain debit and credit from the balance method.

5. Define the various limitations of trial balance?

Ans:  The following are some of the trial balance's limitations:

i. An entry that is not made in the journal will not appear in any of the ledge accounts. As a result, there will be no variation in trial balance.

ii. If an entry is made in the wrong account but on the proper side, the trial balance is unaffected.

iii. If an incorrect amount is written in the journal, the trial balance cannot be used to identify it.

iv. There will be no difference in the trial balance if the entry is not allocated to the correct account.