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Management Sciences 5307 MCQs [All-Courses]

Management Sciences focuses on the planning, organizing, leading, and controlling of resources to achieve organizational goals.This subject is highly important for competitive exams, academic study, and professional careers in the business and public sectors.

Which of the following errors affects the agreement of a Trial Balance?

A Mistake in balancing an account

B Omitting to record a transaction entirely in the subsidiary books

C Recording of a wrong entry in the subsidiary books

D Posting an entry on the correct side but in the wrong account

Review Detailed Answer

Correct Answer: Mistake in balancing an account

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

Review Detailed Answer

Correct Answer: The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by

A 17,000 (overstated.

B 12,000 (understated.

C 7,000 (overstated.

D 7,000 (understated.

Review Detailed Answer

Correct Answer: 7,000 (overstated.

Purchase journal is kept to record_____________?

A All purchases of goods

B All credit purchases of goods

C All credit purchases

D None of these

Review Detailed Answer

Correct Answer: All credit purchases of goods

Which of the following is not correct about Errors?

A Errors which affect one account can be errors of posting

B Errors of omission arise when any transaction is left to be recorded

C Errors of carry forward from one year to another year affect both Personal and Real A/c

D Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner

Review Detailed Answer

Correct Answer: Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner

While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result

A Previous year‘s profit is overstated and current year‘s profit is also overstated.

B Previous year‘s profit is understated and current year‘s profit is overstated.

C Previous year‘s profit is overstated and current year‘s profit is understated.

D There will be no impact on the profit of either the previous year or the current year.

Review Detailed Answer

Correct Answer: Previous year‘s profit is overstated and current year‘s profit is understated.

Which of the following statements is correct about Trial Balance?

A The Trial Balance is prepared after preparing the Profit and Loss Account

B The Trial Balance shows only balances of Assets and Liabilities

C The Trial Balance shows only nominal account balances

D The Trial Balance has no statutory importance from the point of view of law

Review Detailed Answer

Correct Answer: The Trial Balance has no statutory importance from the point of view of law

The adjustment to be made for income received in advance is:

A Add income received in advance to respective income and show it as a liability

B Deduct income received in advance from respective income and show it as a liability

C Add income received in advance to respective income and show it as asset

D Deduct income received in advance from respective income and show it as an asset in the Balance Sheet

Review Detailed Answer

Correct Answer: Deduct income received in advance from respective income and show it as a liability

Which of the following statements is true?

A If a Trial Balance tallies, it always means that none of the transactions has been completely omitted

B A Trial Balance will not tally if a transaction is omitted

C A customer to whom goods have been sold on credit cannot avail himself of a cash discount

D A credit balance in the Pass Book indicates excess of deposits over withdrawals

Review Detailed Answer

Correct Answer: A credit balance in the Pass Book indicates excess of deposits over withdrawals

Closing stock in the Trial Balance implies that______________?

A It is already adjusted in the opening stock

B It is adjusted in the Purchase A/c

C It is adjusted in the Cost of Sale A/c

D It is adjusted in the Profit &Loss A/c

Review Detailed Answer

Correct Answer: It is adjusted in the Purchase A/c

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Management Sciences 5307 MCQs [All-Courses]

All Topics 5307

All Topics 5307

Which of the following errors affects the agreement of a Trial Balance?

The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by

Purchase journal is kept to record_____________?

Which of the following is not correct about Errors?

While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result

Which of the following statements is correct about Trial Balance?

The adjustment to be made for income received in advance is:

Which of the following statements is true?

Closing stock in the Trial Balance implies that______________?