Types And Treatment Of Errors And Uses Of Suspense Account - Accountsprinciplesofaccounts Jamb Past Questions and Answers

Question 1 :

• JAMB 1994

The term "accounting period" is used to refer to the

A. Time span during which taxes are paid to the inland revenue board
B. Budget period, usually one year, relied on by the accountant
C. Time span, usually one year, covered by financial statement
D. Period within which debtors are expected to settle accounts

Question 2 :

• JAMB 1994

Mallam Gambo bought a freezer for his shop costing N10,500. In recording, he debited office expenses account and credited the bank account. What book-keeping error has he committed?

A. Error of commission
B. Error of reversal of entries
C. Error of principle
D. Compensating error

Question 3 :

• JAMB 1994

The suspense account is used to correct book-keeping error where the

A. Amount involved is quite significant
B. Item involved is not material
C. Item involved is unknown
D. Error does not affect the agreement of the trial balance

Question 4 :

• JAMB 1997

Erroneous rearrangement of financial figures such as writing N624 as N 264 is called

A. Transposition
B. Principle
C. Commission
D. Omission

Question 5 :

• JAMB 1998

If the inventory at the end of the current year is understated and the error is not caught during the following year, the effect is to?

A. Overstate income this year and understate in next year
B. Understate income this year and overstate in next year
C. Understate this year's income with no effect on the next year's
D. Overstate the income for the two-year period