PRC-1 · Chapter 8 · Question 86 of 100
An amount of Rs. 11,000 relating to discount allowed was mistakenly credited to the sales account. What is the impact of correcting this error?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Revenue will decrease by Rs. 11,000
Explanation
By falsely crediting sales, revenue was overstated. Correcting it involves reversing the false credit, which decreases revenue by Rs. 11,000.
More Correction of Errors MCQs
- Q88An error where a transaction is entered in the wrong class of account (e.g., an asset account instead of an expense account) is called an:
- Q89An error where a transaction is entered in the correct class of account but the wrong specific personal account is known as an:
- Q90The total of the purchases day book was overcast by Rs. 2,500. How is this error corrected?
- Q91A credit sale of Rs. 4,800 to Zaid was recorded in the sales day book as Rs. 8,400. What is the correcting journal entry?
- Q92The sales return day book was overcast by Rs. 1,200. What is the correcting journal entry?