A trial balance shows equal totals but still contains an error of ₹2,000 where purchase of stationery was debited to furniture account. This is: MCQ with Answer and Explanation

Question

A trial balance shows equal totals but still contains an error of ₹2,000 where purchase of stationery was debited to furniture account. This is:

A. Error of commission

B. Error of omission

C. Error of principle

D. Compensating error

Answer: Option C

Solution (By JKSSB Mock Tests)

Stationery is revenue expenditure, furniture is asset. Treating revenue as capital is error of principle.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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The 'Deferred Tax' on account of timing differences is calculated using:

A. Current year tax rate

B. Minimum Alternate Tax rate

C. Average tax rate

D. Enacted tax rates that will apply in the periods when the differences reverse

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Correct Answer: Option D

Explanation:
Deferred tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

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Question #2

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Under single entry system, profit = closing capital - opening capital + drawings - additional capital introduced. This statement is:

A. Correct

B. Incorrect

C. Partially correct, needs other adjustments

D. Only for companies

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Correct Answer: Option A

Explanation:
In single entry, adjusted profit is derived from capital comparison: Profit = Closing capital + Drawings - Opening capital - Additional capital.

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Question #3

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A firm's break-even point is 4,000 units. The variable cost per unit is ₹20, and the fixed cost is ₹40,000. What is the selling price per unit?

A. ₹30

B. ₹40

C. ₹25

D. ₹35

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Correct Answer: Option A

Explanation:
At BEP, Total Contribution = Fixed Costs. Contribution per unit = Fixed Cost / BEP units = 40,000 / 4,000 = ₹10. Selling Price = Variable Cost + Contribution = 20 + 10 = ₹30.

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