SAQs FROM RECTIFICATION

 SBSIRCommerce Present 

Here are 20 Short Answer Questions (SAQs) with appropriate answers from the "Rectification of Errors" chapter of Accountancy:

1. **What is meant by rectification of errors?**  

   *Rectification of errors refers to the process of correcting mistakes made in the accounting records, ensuring the final accounts are accurate and true.*

2. **What are the types of accounting errors?**  

   *The main types of accounting errors are: (a) Errors of omission, (b) Errors of commission, (c) Errors of principle, (d) Compensating errors.*

3. **What is an error of omission?**  

   *An error of omission occurs when a transaction is completely or partially omitted from the accounting records.*

4. **What is an error of commission?**  

   *An error of commission happens when an entry is made in the wrong account or with the wrong amount, affecting the accuracy of accounts.*

5. **What is an error of principle?**  

   *An error of principle occurs when a transaction is recorded in violation of fundamental accounting principles, such as recording a capital expenditure as revenue expenditure.*

6. **What is a compensating error?**  

   *Compensating errors are two or more errors that cancel each other out, making the trial balance agree despite the mistakes.*

7. **What is a suspense account?**  

   *A suspense account is a temporary account used to balance the trial balance when there are errors that cannot be immediately located.*

8. **How are errors affecting the trial balance rectified?**  

   *Errors affecting the trial balance are rectified by posting the difference to a suspense account, which is adjusted once the error is located and corrected.*

9. **What is the rectification entry for an error of omission?**  

   *The rectification entry for an error of omission is to pass the correct journal entry that was originally omitted.*

10. **How are errors not affecting the trial balance rectified?**  

   *Errors not affecting the trial balance are rectified by simply passing a journal entry to correct the incorrect entry or omission.*

11. **What is the effect of an error of omission on the trial balance?**  

   *An error of complete omission does not affect the trial balance since no entry is made, but a partial omission may cause the trial balance to disagree.*

12. **How is an error of principle rectified?**  

   *An error of principle is rectified by reversing the incorrect entry and recording the transaction in the correct account according to accounting principles.*

13. **What are one-sided errors?**  

   *One-sided errors are errors that affect only one side (either debit or credit) of an account and do not affect the trial balance. These are usually rectified through the suspense account.*

14. **What are two-sided errors?**  

   *Two-sided errors are errors that affect both debit and credit sides equally, such as errors of principle or errors of commission.*

15. **How is a suspense account used in the rectification of errors?**  

   *A suspense account is used to temporarily record the amount of discrepancy found during trial balance preparation. Once the errors are located, the suspense account is adjusted or closed.*

16. **What is the impact of errors on final accounts?**  

   *Errors in accounting can distort the final accounts, leading to an incorrect calculation of profit or loss, and an inaccurate balance sheet.*

17. **What is the rectification entry for a compensating error?**  

   *Compensating errors cancel each other out, so no additional entry is required for their rectification unless individual errors are corrected.*

18. **What is the difference between an error of commission and an error of principle?**  

   *An error of commission is a mistake in the posting of a transaction (e.g., wrong account or wrong amount), while an error of principle involves violating accounting rules (e.g., incorrect classification of revenue or capital items).*

19. **How are errors located after the preparation of final accounts corrected?**  

   *Errors discovered after the preparation of final accounts are corrected in the next accounting period through rectifying journal entries.*

20. **What is the rectification entry for wrongly debiting an expense account instead of an asset account?**  

   *The rectification entry would be to debit the asset account (which was incorrectly omitted) a

nd credit the expense account to reverse the incorrect entry.*