Past year question June 2014

1.Which of the following statements are TRUE of limited liability companies?

(1) The company’s exposure to debts and liability is limited
(2) Financial statements must be produced
(3) A company continues to exist regardless of the identity of its owners

The answer is 2 & 3.

May i ask , why (1) is no the answer? does limited companies advantages is limited liability?

2.Which TWO of the following errors would cause the total of the debit column and the total of the credit column
of a trial balance not to agree?

(1) A transposition error was made when entering a sales invoice into the sales day book
(2) A cheque received from a customer was credited to cash and correctly recognised in receivables
(3) A purchase of non-current assets was omitted from the accounting records
(4) Rent received was included in the trial balance as a debit balance

Answer is 2 & 4.

May i know why 1 is not the answer ? transposition error can be cause x agree of trial bln, isn’t ?

and 4 rent received entry is debit bank/cash, credit income. But question juz mention included in trial bln as debit bln, hw about credit? maybe juz double entry error. Why 4 is also consider correct than 1.

Kindly correct me if i’m wrong.
Thanks.