MASTERING CORRECTION OF
ACCOUNTING ERRORS CORRECT
100%
Internal Accounting controls....
A. Are part of every company's accounting system
B. Prevent accounting errors
C. Guarantee reliable accounting information
D. Help to ensure the reliability of accounting information. - ANSWER D
Which of the following is not used to detect accounting errors?
A. Monthly bank reconciliations
B. Prior period adjustments
C. Monthly trial balances
D. Internal Audits - ANSWER B
If Depreciation expense of $1000 is posted as $100, this is....
A. A transposition error
B. A classification error
C. A slide error
D. Use of an incorrect accounting principle - ANSWER C
If a company calculates bad debt expense at 1% of sales but the percentage used was
5% of sales, this is....
A. A transposition error
B. Use of an improper estimate
C. A slide error
D. Use of an incorrect accounting principle - ANSWER B
SiliCo painted its building at a cost of $10,000 and decided to capitalize it (debit
Buildings,) instead of expensing it (debit Repairs and Maintenance Expense). This is....
A. a transposition error
B. A classification error
C. An improper estimate
D. Use of an incorrect accounting principle - ANSWER D
Fill in the blanks.
, 1. A $300 payment of an electric bill debited to Cash is a(n) _____________ error -
ANSWER posting
Fill in the blanks.
2. The correction of an error is determined by which _______ are affected and
________ the error was found - ANSWER Accounts; when
Fill in the blanks
3. The ________ ________ helps to reveal errors by verifying that total ____________
_______ debits and credits are in balance. - ANSWER trial balance, ledger accounts
Fill in the blanks
4. Errors may be uncovered in the year-end financial audit by the ___________
___________ - ANSWER External Auditor
List three routine accounting procedures during which accounting errors may be
discovered - ANSWER Any of the following are correct:
1. Monthly bank reconciliation
2. Preparation of the trial balance
3. Review of periodic adjustments to the accounts
4. Routing internal audits
5. year-end financial audit
CabotCo's accountant forgot to record annual interest expense. This is....
A. a transposition error
B. an arithmetic mistake
C. Use of an incorrect accounting principle
D. an accrual error - ANSWER D
Fill in the blanks
1. An accounting error is defined as the incorrect __________ and _________ of facts
about the business that existed at the time a(n) ___________ or _______________
was recorded. - ANSWER recording; reporting; event; transaction
Most differences between the end of month bank balance and cash account balance
are caused by differences in _____________ - ANSWER Timing
An error in deprecation expense is likeliest to be discovered when _____________ are
made to the accounts - ANSWER adjustments
ACCOUNTING ERRORS CORRECT
100%
Internal Accounting controls....
A. Are part of every company's accounting system
B. Prevent accounting errors
C. Guarantee reliable accounting information
D. Help to ensure the reliability of accounting information. - ANSWER D
Which of the following is not used to detect accounting errors?
A. Monthly bank reconciliations
B. Prior period adjustments
C. Monthly trial balances
D. Internal Audits - ANSWER B
If Depreciation expense of $1000 is posted as $100, this is....
A. A transposition error
B. A classification error
C. A slide error
D. Use of an incorrect accounting principle - ANSWER C
If a company calculates bad debt expense at 1% of sales but the percentage used was
5% of sales, this is....
A. A transposition error
B. Use of an improper estimate
C. A slide error
D. Use of an incorrect accounting principle - ANSWER B
SiliCo painted its building at a cost of $10,000 and decided to capitalize it (debit
Buildings,) instead of expensing it (debit Repairs and Maintenance Expense). This is....
A. a transposition error
B. A classification error
C. An improper estimate
D. Use of an incorrect accounting principle - ANSWER D
Fill in the blanks.
, 1. A $300 payment of an electric bill debited to Cash is a(n) _____________ error -
ANSWER posting
Fill in the blanks.
2. The correction of an error is determined by which _______ are affected and
________ the error was found - ANSWER Accounts; when
Fill in the blanks
3. The ________ ________ helps to reveal errors by verifying that total ____________
_______ debits and credits are in balance. - ANSWER trial balance, ledger accounts
Fill in the blanks
4. Errors may be uncovered in the year-end financial audit by the ___________
___________ - ANSWER External Auditor
List three routine accounting procedures during which accounting errors may be
discovered - ANSWER Any of the following are correct:
1. Monthly bank reconciliation
2. Preparation of the trial balance
3. Review of periodic adjustments to the accounts
4. Routing internal audits
5. year-end financial audit
CabotCo's accountant forgot to record annual interest expense. This is....
A. a transposition error
B. an arithmetic mistake
C. Use of an incorrect accounting principle
D. an accrual error - ANSWER D
Fill in the blanks
1. An accounting error is defined as the incorrect __________ and _________ of facts
about the business that existed at the time a(n) ___________ or _______________
was recorded. - ANSWER recording; reporting; event; transaction
Most differences between the end of month bank balance and cash account balance
are caused by differences in _____________ - ANSWER Timing
An error in deprecation expense is likeliest to be discovered when _____________ are
made to the accounts - ANSWER adjustments
