Which of the following is an error of omission?

• A) Purchase of vehicle is recorded in repairs account
• B) A payment to a debtor Mr. A is recorded in the account of another debtor Mr. B
• C) Bank charges being deducted by the bank without our knowledge
• D) A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account

Accumulated depreciation of furniture is a/an _________.

• A) Expense account
• B) Contra asset account
• C) Asset account
• D) Liability account

If the credit side of trial balance is heavier than the debit side, suspense account will be written on ________________.

• A) Credit side
• B) None of the given options
• C) Debit side
• D) Both debit and credit side

Under periodic system of recording inventory, purchase of inventory is recognized as _______________.

• A) Asset
• B) Stock
• C) Income
• D) Expense

If some financial information is completely forgotten to record in the books of original entry, such error is known as:

• A) Error of commission
• B) Error of principle
• C) Error of omission
• D) Error of original entry

Prime cost = Direct material cost +

• A) Direct labor cost
• B) Other indirect cost
• C) Indirect labor cost
• D) Indirect material cost

Expenses = ?

• A) Profit – capital
• B) Income – profit
• C) Assets + profit
• D) Profit + income

A new accountant of ABC Corporation has prepared the trial balance. But there is difference in total of both sides of trial balance; such difference can be due to:

• A) Over casting of a ledger account
• B) Omission of a particular account’s balance in trial balance
• C) All of the given options
• D) Under casting of a ledger account

Expired portion of direct cost is a part of________.

• A) Selling expense
• B) Operating expense
• C) Financial expense
• D) Cost of sales

Mr. Y has recorded a stationary expense of Rs. 50 as salaries expense. What will be its effect on net profit?

• A) No effect
• B) Understated by Rs.100
• C) Overstated by Rs.100
• D) Understated by Rs.50

Consumed direct supplies are considered as:

• A) Financial expense
• B) Admin expense
• C) Selling expense
• D) Cost of sales

Shipping supplies consumed is considered as:

• A) Selling expense
• B) Admin expense
• C) Financial expense
• D) Cost of sales

A new accountant of ABC Corporation has prepared the trial balance. But there is difference in total of both sides of trial balance, such amount of difference shall be named as:

• A) Compensation account
• B) Balance account
• C) Suspense account
• D) Error account

Electricity expense is a___________.

• A) Revenue Expenditure
• B) Capital Receipt
• C) Revenue Receipt
• D) Capital Expenditure

Which of the following is an error of principle?

• A) A payment to a debtor Mr. A is recorded in the account of another debtor Mr. B
• B) Bank charges being deducted by the bank without our knowledge
• C) A receipt of Rs. 50,000 from a debtor is recorded as Rs. 5,000 in his account
• D) Purchase of vehicle is recorded in repairs account

Work in process closing inventory is a/an:

• A) Asset
• B) Income
• C) Expense
• D) Liability

In a manufacturing concern, rent of office building is included in _________.

• A) Cost of goods sold
• B) Operating expense
• C) Cost of sales
• D) Preliminary expense

A purchase of plant and machinery is a___________.

• A) Revenue Expenditure
• B) Capital Expenditure
• C) Revenue Receipt
• D) Capital Receipt

Purchase of building costing Rs. 500,000 is recorded in repairs account. What will be its effect on net profit?

• A) Understated by Rs.500,000
• B) Overstated by Rs. 500,000
• C) No effect
• D) Understated by Rs. 1000,000

Which of the following is a Capital receipt?

• A) Purchase of a building
• B) Long term loan from bank
• C) Sales revenue
• D) Payment of salaries