ACC204
Question: What is an error of commission?
Answer: An error where one side of a transaction has been recorded in the wrong account, and that account is of the same class as the correct account
Question: Which one of the following would be an error of principle?
Answer: Plant and machinery purchased was debited to the purchases account
Question: The debit side of a trial balance totals $800 more than the credit side. Which one of the following errors would fully account for the difference?
Answer: Discount received $400 has been debited to discount allowed account
Question: Which one of the following would occur if the purchase of computer stationary was debited to the computer equipment at cost account?
Answer: An overstatement of profit and an overstatement of non-current assets
Question: The purpose of charging depreciation in accounts is?
Answer: To allocate the cost less residual value of a non-current asset over the accounting periods
Question: A company bought a property in Chelsea four years ago on 1 January for $ 170,000. Since then property\nprices have risen substantially and the property has been revalued at $210,000.\nThe property was estimated as having a useful life of 20 years when it was purchased. What amount\nwould be transferred to revaluation reserve?
Answer: 74000
Question: An organisation’s asset register shows a net book value of $145,600. The non-current asset account in the\nnominal ledger shows a net book value of $135,600 The difference could be due to a disposed asset not\nhaving been deducted from the asset register. Which one of the following could represent that asset?
Answer: Asset with disposal proceed of $15,000 and a profit on disposal of $5,000
Question: An organisation’s asset register shows a net book value of $145,600. The non-current asset account in the\nnominal ledger shows a net book value of $135,600 The difference could be due to a disposed asset not\nhaving been deducted from the asset register. Which one of the following could represent that asset?
Answer: [A] Asset with disposal proceed of $15,000 and a profit on disposal of $5,000
Question: Given that a machine bought for $5,000 on 1 January 2016, which had an expected useful life of four years\nand an expected residual value of $1,000; the asset was to be depreciated on the straight-line basis. The\nfirm\’s policy is to charge depreciation in the year of disposal. On 31 December 2018, the machine was sold $1,600.\nWhat amount should be entered in the 2018 statement of comprehensive income for profit or loss on\ndisposal?
Answer: Profit of $350
Question: Given that an asset register has a net book value of $67,460. A non-current asset costing $15,000 had been sold\nfor $4,000, making a loss on disposal of $1,250. No entries had been made in the asset register for this\ndisposal.\nWhat is the correct balance on the asset register?
Answer: 62210
Question: A business purchased a motor car on 1 July 2018 for $20,000. It is to be depreciated at 20 per cent per year\non the straight line basis, assuming a residual value at the end of five years of $4,000, with a proportionateVndepreciation charge in the year of purchase.\nThe $20,000 cost was correctly entered in the cash book but posted to the debit of the motor vehicles\nrepairs accountAnHow will th< business profit for the year ended 31 December 2018 be affected by the error?
Answer: Understated by $18,400
Question: What is an error of commission?
Answer: An error where one side of a transaction has been recorded in the wrong account, and that account is of the same class as the correct account
Question: Which one of the following would be an error of principle?
Answer: Plant and machinery purchased was debited to the purchases account
Question: The debit side of a trial balance totals $800 more than the credit side. Which one of the following errors would fully account for the difference?
Answer: Discount received $400 has been debited to discount allowed account.
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