Complete omission of a transaction is an error of:

Omission. The transaction was not recorded at all.

Which error does NOT affect the trial balance?

Error of principle. Principle errors keep debits and credits equal.

Treating a purchase of furniture as an expense is an error of:

Principle. It violates the capital vs revenue principle.

Errors that cancel each other are:

Compensating errors. Their effect nets to zero.

A suspense account is used to:

Temporarily balance the trial balance. It holds the difference until errors are found.

Maharashtra State Board · HSC Commerce · Class 11 (Std XI)

Class 11 Book Keeping and Accountancy Chapter 8: Rectification of Errors

Short notes, key concepts, quick revision and practice MCQs with answers

Errors made while recording transactions must be corrected. The nature of the error decides whether it affects the trial balance and how it is rectified.

Key concepts: Rectification of Errors

Errors of omission: Transaction is completely or partially not recorded.
Errors of commission: Mistakes in posting, totalling, carrying forward or recording wrong amounts.
Errors of principle: Violation of accounting principles, such as treating a capital expenditure as revenue.
Compensating errors: Errors that cancel each other out; the trial balance still agrees.
Suspense account: Temporary account used to balance the trial balance when it does not agree; cleared after errors are found.
Rectification: Passing correcting journal entries to remove the effect of errors.

Quick revision: important points

Errors of principle and complete omission and compensating errors do not affect the trial balance.
One-sided errors are rectified through suspense account.
Wages paid for installing machinery must be capitalised, not treated as wages expense.

Practice MCQs with answers

Complete omission of a transaction is an error of:
1. Omission
2. Commission
3. Principle
4. Compensation
Show answer
Answer: A. Omission
The transaction was not recorded at all.
Which error does NOT affect the trial balance?
1. Error of principle
2. Wrong totalling
3. One-sided posting
4. Wrong carry forward
Show answer
Answer: A. Error of principle
Principle errors keep debits and credits equal.
Treating a purchase of furniture as an expense is an error of:
1. Principle
2. Omission
3. Commission
4. Casting
Show answer
Answer: A. Principle
It violates the capital vs revenue principle.
Errors that cancel each other are:
1. Compensating errors
2. Errors of omission
3. Errors of principle
4. Fraud
Show answer
Answer: A. Compensating errors
Their effect nets to zero.
A suspense account is used to:
1. Temporarily balance the trial balance
2. Record profits
3. Pay salaries
4. Increase capital
Show answer
Answer: A. Temporarily balance the trial balance
It holds the difference until errors are found.

All Class 11 Book Keeping and Accountancy chapters

Class 11 Book Keeping and Accountancy notes: all chapters