Accounting Mcqs

Q.  The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is

a. The Trial Balance will not agree
b. The balance of creditors is understated
c. The purchases are understated
d. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book


ANSWER: See Answer
 
The favourable bank balance as per Pass Book will be less than the bank balance as per Cash Book, since the debit in the bank account is more than the debit in the Cash Book D.. As debit and credit are for equal amount there is no disagreement of the Trial Balance; Creditors balance is overstated but not understated: The favourable bank balance as per Pass Book will be less than the Bank balance as per Cash Book, since the debit in the Bank Account is more than the debit in the Cash book. Purchases are not affected, as it is a payment to the creditor. Thus, the correct answer is D.
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MCQs:  The closing balance of a petty cash book is a / an___________?
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MCQs:  Which column of a cash book will not have credit balance___________?
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MCQs:  Petty cash balance is a/an___________?
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MCQs:  Which of these is a Part of cash in hand?
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MCQs:  Which of the following is a Real A/c?
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MCQs:  Which of the following is a representative Personal A/c?
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MCQs:  Which of the following is a Nominal A/c ?
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MCQs:  Goodwill A/c is a/an__________?
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MCQs:  Posting is the process of____________?
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MCQs:  A book wherein various accounts are opened is called____________?
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MCQs:  Which of these is not a special purpose journal?
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MCQs:  The periodic total of sales day book is posted to___________?
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MCQs:  The periodic total of purchase day book is posted to____________?
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MCQs:  Capital expenses are shown in___________?
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MCQs:  Revenue receipts are shown in___________?
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MCQs:  Revenue is generally recognized as being earned at that point of time when?
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MCQs:  Which of the following is a revenue expenses?
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MCQs:  Which of the following is a capital expenditure?
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MCQs:  Which of these types of expenditure would not be treated as a Capital Expenditure?
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MCQs:  Expenses of the following nature are treated as a Revenue expenses except__________?
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