Trial Balance Test 4

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Trial Balance Test 4

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Question 1
1 / -0

Trial balance is prepared to __________.

A
Check true and fair view of balance Sheet.

B
To check arithmetic accuracy of Accounts.

C
To ensure legal compliance

D
To ensure compliance to IFRS

Solution

The trial Balance is prepared to
1. To ascertain the arithmetical accuracy of the ledger accounts.
2. To help in locating errors.
3. To help in the preparation of the financial statements. (Profit & Loss account
and Balance Sheet).
Question 2
1 / -0

_______ is the most widely used method in practice.

A
Total Method

B
Balance Method

C
Totals-cum-balances Method

D
None of the above

Solution

Under balances method trial balance is prepared by showing the balances of all ledger accounts and then totalling up the debit and credit columns of the trial balance to assure their correctness. Balances Method is the most widely used method in practice.
Question 3
1 / -0

_________ is a statement of accounts which appeared in the ledger.

A
Trial balance

B
Memorandum of account

C
Balance sheet

D
Journal

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 task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them in the ledger.
Question 4
1 / -0

Trial balance is prepared to _________.

A
comply with legal requirements

B
comply with accounting standards

C
check arithmetic correctness of books of A/c

D
to ensure true and fair view of books of A/c

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 the final position of all accounts and helps in preparing the final statements. The task of preparing the statement is simplified because the accountant can take the account balances from the trial balance instead of looking them up into the ledger.
Question 5
1 / -0

Which of these is an indicator of arithmetic discrepancies in books of account?

A
Agreement of trial balance.

B
Disagreement of trial balance.

C
Non-balancing of cash book.

D
Non-balancing of personal account.

Solution

Trial balance is prepared by taking the individual ledger balances. If the trial balance agrees, it proves that the books are arithmetically correct. If trial balance is not tallied i.e. debit and credit balances do not agree, that means the books of account are not arithmetically correct.

Disagreement of trial balance is an indicator of arithmetic discrepancies in books of account.
Question 6
1 / -0

The preparation of a trial balance helps in locating _________.

A
Compensating errors

B
Error of omission

C
Error of Principle

D
All of the above

Solution

Trial balance is prepared at the end of the financial year to check the accuracy of the books of account. If trial balance agrees, this can be assume that the books of account are arithmetical correct. But there are other types of errors which are there even the trial balance tally.

Preparation of trial balance helps in locating the following error:
Compensating error
Error ofomission
Error of principle
Question 7
1 / -0

A trial balance is a ________________.

A
Real Account

B
Nominal Account

C
List of balances

D
Personal Account

Solution

A trial balance is a list of all the general ledger accounts (both revenue and capital) contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance.
Question 8
1 / -0

Preparation of Trial Balance helps, mainly in ________.

A
summarising business transactions

B
verifying the 'generally accepted accounting principles' have been observed

C
finalising the 'sources and uses of funds' statement

D
locating errors, if any, in books of accounts

Solution

Trial balance is prepared at the end of the financial year to check the accuracy of the books of account. If trial balance agrees, this can be assume that the books of account are arithmetical correct. But there are other types of errors which are there even the trial balance is tally.

Preparation of trial balance helps in locating the following error:
Compensating error
Error ofomission
Error of principle
Question 9
1 / -0

Balance appearing on the credit side of the trial balance is _________.

A
a gain

B
a revenue

C
a liability

D
all of these

Solution

There are certain rules for the different type of account i.e personal a/c, real a/c and nominal a/c. On the basis of these rules, all expenses, losses and assets are debited and all revenue, gains and liabilities are to be credited.
Question 10
1 / -0

Which of the following statements is correct?

A
The trial balance is prepared after preparing the profit and loss account.

B
The trial balance shows only balances of assets and liabilities

C
The trial balance shows only nominal account balances.

D
The trial balance has no statutory importance from the point of view of law.

Solution

Trial balance is prepared by taking all the ledger account balances in a list. Trial balance is prepared to check the arithmetical accuracy of books of account. If trial balance agrees, it is assumed that the books of account are arithmetical correct. So, it is prepared just to check that all posting are done. Trial balance has no statutory importance from the point of view of law.

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Trial Balance Test 4

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Trial Balance Test 4

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SHARING IS CARING

Question 1

Check true and fair view of balance Sheet.

To check arithmetic accuracy of Accounts.

To ensure legal compliance

To ensure compliance to IFRS

Solution

Question 2

Total Method

Balance Method

Totals-cum-balances Method

None of the above

Solution

Question 3

Trial balance

Memorandum of account

Balance sheet

Journal

Solution

Question 4

comply with legal requirements

comply with accounting standards

check arithmetic correctness of books of A/c

to ensure true and fair view of books of A/c

Solution

Question 5

Agreement of trial balance.

Disagreement of trial balance.

Non-balancing of cash book.

Non-balancing of personal account.

Solution

Question 6

Compensating errors

Error of omission

Error of Principle

All of the above

Solution

Question 7

Real Account

Nominal Account

List of balances

Personal Account

Solution

Question 8

summarising business transactions

verifying the 'generally accepted accounting principles' have been observed

finalising the 'sources and uses of funds' statement

locating errors, if any, in books of accounts

Solution

Question 9

a gain

a revenue

a liability

all of these

Solution

Question 10

The trial balance is prepared after preparing the profit and loss account.

The trial balance shows only balances of assets and liabilities

The trial balance shows only nominal account balances.

The trial balance has no statutory importance from the point of view of law.

Solution

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