Corrections of errors — Paper 1 · IGCSE Accounting (9-1) 0985

11 The income statement of a business showed a loss for the year of $16 000. On checking the books the following errors were discovered. 1 No adjustment had been made for insurance prepaid, $480. 2 No entry had been made for bank charges, $620. What was the correct loss for the year? A $14 900 B $15 860 C $16 140 D $17 100

1 marks

Answer: C

This question in 0985/11 May/June 2020

15 A non-current asset was depreciated at the end of the first year of ownership using the straight-line method based on the following information. cost $20 000 working life 4 years residual value $4000 It was then found that the reducing balance method at 30% per annum should have been used. What was the effect on the profit for the year of correcting this error? A decrease by $2000 B increase by $2000 C decrease by $6000 D increase by $6000

1 marks

Answer: A

This question in 0985/11 May/June 2020

22 The owner of a business took goods for his own use but forgot to make an entry in the accounts. What was the effect of this error? profit for the year capital employed A overstated no effect B overstated understated C understated no effect D understated overstated

1 marks

Answer: C

This question in 0985/11 May/June 2020

10 Sita discovers that $1000 received from the sale of fixtures had been entered in the sales account. Which journal entry corrected this error? debit credit $ $ bank 1000 A disposal of fixtures 1000 bank 1000 B fixtures 1000 sales 1000 C disposal of fixtures 1000 sales 1000 D fixtures 1000

1 marks

Answer: C

This question in 0985/12 May/June 2020

11 The totals of a trial balance did not agree and $200 was debited to a suspense account. On checking the books it was found that two errors had been made. 1 A sales invoice for $700 had been recorded in the sales journal as $770. 2 The sales journal had been totalled incorrectly. What was the error made in totalling the sales journal? A overcast by $130 B overcast by $200 C undercast by $130 D undercast by $200

1 marks

Answer: B

This question in 0985/12 May/June 2020

12 The income statement of a business showed a loss for the year of $16 000. On checking the books the following errors were discovered. 1 No adjustment had been made for insurance prepaid, $480. 2 No entry had been made for bank charges, $620. What was the correct loss for the year? A $14 900 B $15 860 C $16 140 D $17 100

1 marks

Answer: C

This question in 0985/12 May/June 2020

16 A non-current asset was depreciated at the end of the first year of ownership using the straight-line method based on the following information. cost $20 000 working life 4 years residual value $4000 It was then found that the reducing balance method at 30% per annum should have been used. What was the effect on the profit for the year of correcting this error? A decrease by $2000 B increase by $2000 C decrease by $6000 D increase by $6000

1 marks

Answer: A

This question in 0985/12 May/June 2020

20 Joel’s inventory on 31 December 2019 was valued at $4800. It was discovered that: 1 Goods, cost $100, had not been included. 2 Goods, cost $170, had been included at net realisable value $210. What was the effect of the incorrect inventory valuation on Joel’s financial statements at 31 December 2019? profit for $ inventory $ equity $ the year A overstated 40 understated 40 nil B overstated 60 understated 60 nil C understated 40 understated 40 understated 40 D understated 60 understated 60 understated 60

1 marks

Answer: D

This question in 0985/12 May/June 2020

21 The owner of a business took goods for his own use but forgot to make an entry in the accounts. What was the effect of this error? profit for the year capital employed A overstated no effect B overstated understated C understated no effect D understated overstated

1 marks

Answer: C

This question in 0985/12 May/June 2020

9 A transaction was posted to the wrong account of the same class. Which type of error was made? A commission B original entry C principle D reversal

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2020

10 Motor vehicle expenses, $50, were incorrectly debited to the motor vehicles account. Which journal entry corrects this error? debit credit $ $ A motor vehicle expenses 50 motor vehicles 50 B motor vehicles 50 motor vehicle expenses 50 C motor vehicles expenses 50 motor vehicles 50 suspense 100 D suspense 100 motor vehicles expenses 50 motor vehicles 50

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2020

11 Kate calculated her draft profit for the year at $28 400. She later discovered the following errors. 1 Rent prepaid by Kate was understated by $1000. 2 Closing inventory was understated by $1500. What was the correct profit for the year? A $25 900 B $27 900 C $28 900 D $30 900

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2020

15 A trader debited the cost of repairing office equipment to the office equipment account. How did this error affect the financial statements? profit for non-current the year assets A overstated overstated B overstated understated C understated overstated D understated understated

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2020

16 Rashid provided the following information at 31 December. $ machinery at cost 52 000 provision for depreciation of machinery 23 000 Depreciation for the year is calculated at 20% on cost. After the statement of financial position was prepared it was found that the machinery repairs costing $2000 had been debited to the machinery account. What is the correct balance on the provision for the depreciation of machinery account? A $21 000 B $22 600 C $23 400 D $25 000

1 marks

Answer: B

This question in 0985/12 Oct/Nov 2020

6 Which items would be recorded in the general journal of a bakery? 1 correction of an error of principle relating to an oven repair 2 purchase of a delivery vehicle on credit 3 purchase of flour on credit 4 return by a customer of a faulty batch of bread A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

1 marks

Answer: A

This question in 0985/11 May/June 2021

30 A trader provided the following information. $ $ revenue 3600 opening inventory 100 purchases 2600 2700 closing inventory 300 2400 gross profit 1200 It was found that the closing inventory should have been $400. What was the correct rate of inventory turnover? A 6 times B 8 times C 9.2 times D 14.4 times

1 marks

Answer: C

This question in 0985/11 May/June 2021

10 Which error is an error of original entry? A sale of surplus office equipment on credit to Janet for $230 entered as $320 in both the disposal account and Janet’s account B sale of surplus office equipment on credit to Janet for $230 entered in the office equipment account and Jason’s account C sale of surplus office equipment on credit to Janet for $230 entered in the sales account and Janet’s account D sale of surplus office equipment on credit to Janet for $230 not entered in any accounts

1 marks

Answer: A

This question in 0985/12 May/June 2021

11 A cheque, $85, received from Shakeel, was credited to the account of Shamz. Which journal entry corrects this error? debit credit $ $ A bank 85 Shakeel 85 B Shakeel 85 Shamz 85 C Shamz 85 bank 85 D Shamz 85 Shakeel 85

1 marks

Answer: D

This question in 0985/12 May/June 2021

16 Nia sold equipment with a net book value of $200. The proceeds of the sale, $250, were credited to the sales account and debited in the cash book. What was the effect of this error on Nia’s gross profit and profit for the year? gross profit $ profit for the year $ A overstated 50 overstated 50 B overstated 200 understated 250 C overstated 250 overstated 200 D understated 250 understated 200

1 marks

Answer: C

This question in 0985/12 May/June 2021

10 A sales invoice for $800 was incorrectly recorded in the sales journal as $1800. How did this error affect the trial balance? A The trial balance balanced but both totals were overstated by $1000. B The trial balance balanced but both totals were understated by $1000. C The trial balance did not balance because the credits were overstated by $1000. D The trial balance did not balance because the debits were understated by $1000.

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2021

9 What is an example of a compensating error? A A payment for office equipment repairs was debited to the office equipment account. B A purchase of goods from C Jones was credited to the account of C Johns. C The sale of goods, $65, to A Aziz was entered in the books as $56. D The wages account was undercast by $100 and the rent account was overcast by $100.

1 marks

Answer: D

This question in 0985/11 May/June 2022

10 After the preparation of Abdul’s draft financial statements, two errors were discovered. The purchase of a machine by bank transfer, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital? non-current assets working capital $ $ A increase 15 000 decrease 5000 B increase 15 000 no effect C increase 20 000 decrease 5000 D increase 20 000 no effect

1 marks

Answer: C

This question in 0985/11 May/June 2022

15 On 1 January, Zac entered the cost of repairing equipment, $420, in the equipment account. On 31 December, depreciation of 20% per annum, using the straight-line method, was charged on the balance of the equipment account. What was the overall effect on the book value of the equipment on 31 December? A $84 understated B $336 overstated C $420 overstated D $504 understated

1 marks

Answer: B

This question in 0985/11 May/June 2022

7 What is an example of a compensating error? A A payment for office equipment repairs was debited to the office equipment account. B A purchase of goods from C Jones was credited to the account of C Johns. C The sale of goods, $65, to A Aziz was entered in the books as $56. D The wages account was undercast by $100 and the rent account was overcast by $100.

1 marks

Answer: D

This question in 0985/12 May/June 2022

8 After the preparation of Abdul’s draft financial statements, two errors were discovered. The purchase of a machine by bank transfer, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15 000, was entered in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital? non-current assets working capital $ $ A increase 15 000 decrease 5000 B increase 15 000 no effect C increase 20 000 decrease 5000 D increase 20 000 no effect

1 marks

Answer: C

This question in 0985/12 May/June 2022

11 Maria’s draft income statement for the year ended 31 March 2022 showed a profit for the year of $38 750. On 31 December 2021, Maria received a 5% bank loan of $4800 which was incorrectly treated as a revenue receipt. In error, a whole year’s interest on the bank loan was included in the draft income statement for the year ended 31 March 2022. What was the correct profit for the year ended 31 March 2022? A $33 770 B $34 130 C $43 370 D $43 730

1 marks

Answer: B

This question in 0985/12 May/June 2022

16 After the financial statements for the year ended 30 April 2022 had been prepared, a trader discovered that the closing inventory had been over-valued. What will be the effect of this error? profit for the year capital on profit for the year ended 30 April 2022 30 April 2022 ending 30 April 2023 A overstated overstated understated B overstated understated no effect C understated no effect no effect D understated understated overstated

1 marks

Answer: A

This question in 0985/12 May/June 2022

9 Saddique’s trial balance failed to balance. The debit column totalled $12 250 and the credit column totalled $12 200. The following errors were discovered. No entry had been made for cash sales, $150. The total of the discount received account, $50, had been omitted from the trial balance. What were the totals of the trial balance after the errors had been corrected? A $12 250 B $12 300 C $12 350 D $12 400

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2022

10 $68 paid by credit transfer for insurance was entered in the accounting records as $86. Which double entry will correct this error? account debited $ account credited $ A bank 18 insurance 18 B bank 68 insurance 68 C insurance 18 bank 18 D insurance 68 bank 68

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2022

11 After the preparation of her income statement, Emma discovered the following errors. A debt, $1500, should have been written off as irrecoverable. No adjustment had been made for rent prepaid by Emma of $2800. The draft profit for the year was $35 000. What was the corrected profit for the year? A $30 700 B $33 700 C $36 300 D $39 300

1 marks

Answer: C

This question in 0985/12 Oct/Nov 2022

26 In a manufacturing account, carriage on raw materials was incorrectly treated as a factory overhead. How did this error affect the prime cost and the cost of production? cost of prime cost production A overstated no effect B overstated overstated C understated no effect D understated understated

1 marks

Answer: C

This question in 0985/12 Oct/Nov 2022

9 After completing the trial balance, it was found that an amount of $4000 for motor vehicle repairs had been entered in the motor vehicle account. Which type of error is this? A commission B compensating C omission D principle

1 marks

Answer: D

This question in 0985/11 May/June 2023

10 At the end of his financial year, Zane opened a suspense account. Why was it necessary to open this account? A the suspense account had been omitted from the ledger B the trial balance totals did not agree C to correct an error of commission D to make sure no errors were made in the ledger

1 marks

Answer: B

This question in 0985/11 May/June 2023

11 Jack has opened a suspense account. He has found that rent paid of $250 has been correctly entered in the rent account but credited to the bank account as $520. Which entries will correct this error? debit $ credit $ A bank account 270 suspense account 270 B bank account 520 suspense account 520 C suspense account 270 bank account 270 D suspense account 520 bank account 520

1 marks

Answer: A

This question in 0985/11 May/June 2023

17 Rashid provided the following balances at 31 December. $ machinery at cost 52 000 provision for depreciation of machinery 23 000 Depreciation for the year was calculated at 20% on cost and is included in the balance for the provision. After the balances had been extracted, it was found that machinery repairs costing $2000 had been debited in error to the machinery account. What is the correct balance on the provision for the depreciation of machinery account? A $21 000 B $22 600 C $23 400 D $25 000

1 marks

Answer: B

This question in 0985/11 May/June 2023

20 Which error causes the gross profit to be overstated? A closing inventory under-valued B opening inventory omitted from the income statement C purchases recorded before deduction of trade discount D sales invoices omitted from the sales journal

1 marks

Answer: B

This question in 0985/11 May/June 2023

27 P Limited maintains a provision for doubtful debts account. On 1 April 2022, this account had a balance of $6200. The provision should have been increased to $7400 on 31 March 2023, but this adjustment was not made. What was the effect of this error on the retained earnings in the statement of financial position on 31 March 2023? A overstated $1200 B overstated $7400 C understated $1200 D understated $7400

1 marks

Answer: A

This question in 0985/11 May/June 2023

7 Tahir prepared a trial balance. He entered both the balance on the discount allowed account, $900, and the bank overdraft, $750, in the wrong column. Which total of the trial balance was higher and what was the amount of the difference between the debit total and the credit total? amount of total that difference was higher $ A credit column 300 B credit column 1650 C debit column 150 D debit column 3300

1 marks

Answer: A

This question in 0985/12 May/June 2023

8 Goods sold on credit to J Sharp were debited in error to the account of T Sharpe. Which type of error has been made? A commission B complete reversal C original entry D principle

1 marks

Answer: A

This question in 0985/12 May/June 2023

9 Khalid made entries in a suspense account to correct two errors found in his ledger accounts. Once the errors were corrected, the suspense account was closed. error 1 $700 sales had been omitted from the sales account. error 2 The purchases journal had been overcast by $550. Which entry was made in the suspense account to balance the trial balance? A credit $150 B credit $1250 C debit $150 D debit $1250

1 marks

Answer: B

This question in 0985/12 May/June 2023

10 Maya depreciates her motor vehicle at 25% per annum using the straight-line method. The motor vehicle cost $15 000. The depreciation for the current financial year was incorrectly calculated at 15% per annum. How will correcting the error affect the profit for the year? A decrease $1500 B decrease $2250 C increase $1500 D increase $2250

1 marks

Answer: A

This question in 0985/12 May/June 2023

15 A trader debited the cost of repairing office equipment to the office equipment account. How did this error affect the financial statements? profit for non-current the year assets A overstated overstated B overstated understated C understated overstated D understated understated

1 marks

Answer: A

This question in 0985/12 May/June 2023

8 A cheque received from Joe was credited to Joanna’s account. Which type of error was made? A commission B compensating C original entry D principle

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2023

9 A trader’s journal shows the following entry. debit credit details $ $ John 300 Jane 300 correction of error Both John and Jane are credit customers of the trader. Which error is the journal entry correcting? A Goods bought from Jane were wrongly credited to John. B Goods bought from John were wrongly credited to Jane. C Goods sold to Jane were wrongly debited to John. D Goods sold to John were wrongly debited to Jane.

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2023

10 A trial balance does not balance and a suspense account is opened. It is found that a sale of $250 was credited in the sales account as $2500. Which entry will correct this error? account to account to $ $ be debited be credited A sales 250 suspense 250 B sales 2250 suspense 2250 C suspense 2250 sales 2250 D suspense 2500 sales 2500

1 marks

Answer: B

This question in 0985/12 Oct/Nov 2023

11 A cheque received from D Pawson, a trade receivable, was correctly debited to the bank account but was credited to the account of P Dawson, a trade payable. What was the effect of correcting this error? trade trade receivables payables A decrease decrease B decrease increase C increase decrease D increase increase

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2023

15 Plant and machinery, $2000, was incorrectly posted to the credit side of the purchases account. The draft profit for the year was $63 000. Ignore depreciation. What was the revised profit for the year after the correction of the error? A $59 000 B $61 000 C $65 000 D $67 000

1 marks

Answer: B

This question in 0985/12 Oct/Nov 2023

8 Trevor prepared his financial statements for the year ended 31 December 2020. He then discovered that he had omitted to record a cash payment, $240, for insurance for the 12 months ending 30 November 2021. What was the effect of this error on his statement of financial position? cash other receivables capital A $240 overstated $20 understated $220 overstated B $240 overstated $220 understated $20 overstated C $240 understated $20 overstated $220 understated D $240 understated $220 overstated $20 understated

1 marks

Answer: B

This question in 0985/11 May/June 2024

9 A payment of $68 for insurance has been entered in the insurance account as $86. Which double entry will correct this? debit credit A insurance $18 suspense $18 B insurance $36 suspense $36 C suspense $18 insurance $18 D suspense $36 insurance $36

1 marks

Answer: C

This question in 0985/11 May/June 2024

19 At the end of the financial year Cindy valued her inventory at cost. This valuation incorrectly included damaged goods costing $300. Cindy estimated these goods could be sold for $100. What is the effect of correcting the inventory valuation? gross profit profit for the year current assets A decreases by $200 decreases by $200 decreases by $200 B decreases by $300 decreases by $300 decreases by $300 C increases by $100 increases by $100 increases by $100 D increases by $200 increases by $200 increases by $200

1 marks

Answer: A

This question in 0985/11 May/June 2024

7 A book-keeper made two errors which cancelled each other out. Which type of error did he make? A compensating B complete reversal C original entry D principle

1 marks

Answer: A

This question in 0985/12 May/June 2024

8 The totals of a trial balance did not agree and $200 was debited to a suspense account. The book-keeper then checked the books and found the following two errors. 1. A sales invoice for $700 had been recorded in the sales journal as $770. 2. The sales journal had been totalled incorrectly. What error was made when the sales journal was totalled? A overcast by $130 B overcast by $200 C undercast by $130 D undercast by $200

1 marks

Answer: B

This question in 0985/12 May/June 2024

9 A trader took some goods from the business for his own use. He credited the purchases account with the cost price of the goods, $200, and credited the sales account with the selling price, $300. Which entries did he make to correct the error? debit $ credit $ A drawings 200 suspense 300 income statement 100 B drawings 200 suspense 500 sales 300 C suspense 300 drawings 200 income statement 100 D suspense 500 drawings 200 sales 300

1 marks

Answer: B

This question in 0985/12 May/June 2024

14 The cost of repairs to machinery was debited to the machinery account. What was the effect of this error? non-current assets profit for the year A overstated overstated B overstated understated C understated overstated D understated understated

1 marks

Answer: A

This question in 0985/12 May/June 2024

9 A trader’s draft income statement showed a profit for the year of $24500. The following errors were later discovered. 1 No adjustment had been made for accrued income of $8000. 2 Carriage inwards of $250 had been recorded as carriage outwards. 3 An increase in provision for doubtful debts of $120 had been treated as an addition to the gross profit for the year. What was the corrected profit for the year? A $32010 B $32260 C $32380 D $32740

1 marks

Answer: B

This question in 0985/12 Oct/Nov 2024

14 Hamid owns a grocery store. He bought a motor vehicle, $2000, and fuel, $50. Both of these amounts were incorrectly debited to the purchases account. What was the effect of this error on the income statement for the year? gross profit motor vehicle expenses $ $ A overstated 2000 overstated 2050 B overstated 2050 overstated 50 C understated 2000 understated 2050 D understated 2050 understated 50

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2024

19 After preparing draft financial statements at the end of her first year of trading, Lucy discovered two errors. 1 Damaged inventory had been valued at its cost price of $340. It was expected to sell for $180. 2 100 items which had been expected to sell for $12 each had been valued at their cost price of $7 each. Carriage inwards of $1 for each item had not been included in the cost. What was the effect of these errors on the gross profit? A overstated $60 B overstated $240 C understated $60 D understated $240

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2024

8 The totals of a trial balance did not agree, and a suspense account was opened. It was later found that the total of the discount allowed column in the cash book of $100 had been credited to the discount allowed account. Which journal entry corrects this error? debit credit $ $ A discount allowed 100 suspense 100 B discount allowed 200 suspense 200 C suspense 100 discount allowed 100 D suspense 200 discount allowed 200

1 marks

Answer: B

This question in 0985/11 May/June 2025

9 After calculating his profit for the year, Yui discovered the following errors. 1 A purchase of a new motor vehicle for $3200 was debited to motor expenses. 2 The purchases account was overcast by $500. What was the effect on the profit for the year after correcting these errors (ignore depreciation)? A It decreased by $2700. B It decreased by $3700. C It increased by $2700. D It increased by $3700.

1 marks

Answer: D

This question in 0985/11 May/June 2025

10 Jerry received a cheque of $450 from Fatima. He entered the receipt of the cheque correctly in his cash book. The posting to Fatima’s account was reversed in error. Which journal entry corrects this error? account debited account credited A bank $450 Fatima $450 B bank $900 suspense $900 C suspense $450 bank $450 D suspense $900 Fatima $900

1 marks

Answer: D

This question in 0985/11 May/June 2025

7 Ziningi prepared a trial balance. The total of the debit column was $225750, and the total of the credit column was $225250. What could explain the difference? A The bank overdraft of $250 was included as a debit balance. B Discount allowed of $500 was included as a debit balance. C Purchases returns for $250 were included as a credit balance. D Sales returns of $500 were included as a debit balance.

1 marks

Answer: A

This question in 0985/12 May/June 2025

8 Michael opened a suspense account when he prepared draft financial statements. He then discovered that purchases of $68 had been credited to the purchases account as $86. Which entry was made in the suspense account when this error was corrected? A $18 credit B $18 debit C $154 credit D $154 debit

1 marks

Answer: C

This question in 0985/12 May/June 2025

9 Sameer calculated that his profit for the year was $6300. He then found two errors. 1 A cheque for $3250, received from a credit customer, had only been recorded in the cash book. 2 The total of the discount allowed column in the cash book, $300, had been credited to the discount received account. What was Sameer’s corrected profit for the year? A $2450 B $2750 C $5700 D $6000

1 marks

Answer: C

This question in 0985/12 May/June 2025

10 Miguel’s cash book showed a debit bank balance of $4220. He later discovered the following errors. 1 A cheque for $200, issued for the purchase of office equipment, had been recorded in error in the office expenses account. 2 Bank charges of $30 had been recorded in the cash book as $70. What was the effect of these errors on his statement of financial position? non-current assets (cost) current assets A overstated by $200 no effect B understated by $200 no effect C understated by $200 overstated by $30 D understated by $200 understated by $40

1 marks

Answer: D

This question in 0985/12 May/June 2025