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Trial Balance Test 2

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Trial Balance Test 2
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  • Question 1
    1 / -0
    The amount listed for cash in the trial balance represents __________________.
    Solution
    A Trial Balance is a statement that states the closing balances of all the accounts at the end of the accounting period. Thus, similar to all the other accounts, the closing balance of cash and bank only appears in the Trial Balance.
    Thus, the correct option is D.
  • Question 2
    1 / -0
    Most widely used method in preparation of trial balance is __________.
    Solution
    Trial balance can be prepared in three ways:

    1) Total cum balance method- In this method, total and balances both are captured in tabular form. 
    2) Total Method- In this method, total of debit and credit are incorporated in the tabular form.
    3) Balance method- In this method, only balances are taken in the trial balance.  This method is most widely used for preparation of trial balance.
  • Question 3
    1 / -0
    The Trial balance shows only _________ accuracy. 
    Solution
    A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process. which shows final position of all accounts and helps in preparing the final statements.
    The purpose of preparing a trial balance is to ascertain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced.  As a summary of the ledger, it is a list of the accounts and their balances. When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct. However, the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts. It only ensures that all debits and the corresponding credits have been properly recorded in the ledger.

  • Question 4
    1 / -0
    A Trial Balance is a list of __________ accounts.
    Solution
    Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy. 
  • Question 5
    1 / -0
    A Trial balance provides the base for preparation of __________.
    Solution
    Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy.  If trial balance agrees, it provides the base to prepare the final accounts. Financial statements are prepared using all these ledger balances in the trading, profit & loss account and the balance sheet.
  • Question 6
    1 / -0
    A Trial balance is a _________.
    Solution
    Trial Balance is prepared by taking the balances of all ledger account. It is a list of all ledger account. Trial balance is prepared to check the arithmetical accuracy.  Trial balance is a statement of all ledger balances. 
  • Question 7
    1 / -0
    Which of the following is not an example of clerical or technical error?
    Solution
    There are four types of error which may arise during the accounting:
    1) Error of Principle
    2) Error of commission
    3) Error of omission
    4) Compensating Error

    Misappropriation of cash is a fraudulent activity and its not fall in any of the error category. 
  • Question 8
    1 / -0
    Goodwill account appears on _____________ side of Trial Balance.
    Solution
    Fixed assets are classified as tangible and intangible assets. All the assets will always show a debit balance.
    Goodwill is a type of an intangible fixed asset which is shown in the balance sheet under the fixed assets. Such an item will always show a debit balance as it is an asset for the business entity.
  • Question 9
    1 / -0
    Trial balance is useful for locating ____________.
    Solution
    The objective of preparing the trial balance is to check the accuracy of posting. If trial balance agrees, it proves that books are arithmetically accurate. If it does not agree, there are chances of error. 
    Hence, Trail balance is useful for locating errors.
  • Question 10
    1 / -0
    Drawing account appears in ________ column of the trial balance.
    Solution
    Drawing is a personal withdrawal done by the proprietor. All personal drawings are debited to the drawing account. 
    Drawing account will always have a debit balance. Drawing account must be shown in the debit side of trial balance. 
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