When credit sales of Rs 5,000 to Ram are wrongly posted as Rs 500 in his account, it is an error of: MCQ with Answer and Explanation

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When credit sales of Rs 5,000 to Ram are wrongly posted as Rs 500 in his account, it is an error of:

A. Principle

B. Compensating

C. Omission

D. Commission

Answer: Option D

Solution (By JKSSB Mock Tests)

An error of commission includes posting wrong amounts. It will cause a mismatch in the Trial Balance.

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

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Question #1

In cost accounting, the 'Re-order Level' is calculated as:

A. Minimum consumption rate x Minimum re-order period

B. Normal consumption rate x Normal re-order period

C. Maximum consumption rate x Maximum re-order period

D. Average consumption rate x Average re-order period

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Correct Answer: Option C

Explanation:
The Re-order Level is the level at which a new order is placed. To ensure stock doesn't run out during the maximum lead time, it is calculated as Maximum consumption rate multiplied by Maximum re-order period.

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

Question #2

Input Tax Credit under GST can be claimed on:

A. Motor vehicles for personal use

B. Food and beverages for employees

C. Membership of club

D. Goods used for business furtherance

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Correct Answer: Option D

Explanation:
ITC is available only for inputs used in the course of business, subject to conditions in CGST Act.

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

Question #3

If a business purchases goods worth ₹60,000 paying ₹20,000 cash and the balance on credit, the accounting equation will show:

A. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹0

B. Increase in assets ₹60,000, increase in liabilities ₹60,000

C. Increase in assets ₹40,000, increase in liabilities ₹40,000

D. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹20,000

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Correct Answer: Option A

Explanation:
Assets increase by ₹60,000 (stock), cash decreases by ₹20,000, net assets increase ₹40,000; liabilities increase by ₹40,000 (creditors). Capital is unchanged. Equation: Assets = Liabilities + Capital, here +40,000 = +40,000 + 0.

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

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