1/15
Debit: Trade Receivables – Rezal, Credit: Sales revenue
Debit: Sales revenue, Credit: Trade Receivables – Rebel
2/15
What is the effect of the following error on profit of the year?
“Interest received of $400 was recorded DR Interest received, CR Cash at Bank”
Profit of the year overstated by $400
Profit of the year understated by $400
Profit of the year overstated by $800
Profit of the year understated by $800
3/15
DR Trade payable Dom, CR Trade payable Tom
DR Office equipment, CR Trade payable Dom
DR Trade payable Tom, CR Trade payable Dom
DR Trade payable Tom, CR Office equipment
4/15
Repairs to machinery were wrongly recorded in the machinery account. The correct journal entry to correct this error is ____________________.
DR Inventory, CR Cash at Bank $1,800
DR Inventory, CR Cash at Bank $2,000
DR Cash at Bank, CR Inventory $1,800
DR Cash at Bank, CR Inventory $2,000
6/15
An unacceptable way to correct for errors discovered in a business’ book of accounts is to
reverse the incorrect entry.
erase the incorrect entry
compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts.
correct it immediately upon discovery
7/15
State the effect on profit after correcting “cost of sales for $770 was recorded by debiting inventory and crediting cost of sales”.
Profit will decrease by $1,540.
Profit will increase by $1,540
There is no effect on profit
Profit will decrease by $770
8/15
9/15
10/15
11/15
The recording of a transaction involving the wrong account of a different accounting element will result in the trial balance not being able to reveal the error.
12/15
13/15
14/15
