Trial Balance Test 7

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Trial Balance Test 7

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Question 1
1 / -0

It is a check on the accuracy of posting. If the trial balance agrees it proves that -
1. The books are arithmetically accurate
2. Both the aspects of the transactions have correctly recorded in the books of original entry as well as in the ledger.
The correct answer is ___________________.

A
$$1$$ but not $$2$$

B
$$2$$ but not $$1$$

C
Both $$1$$ & $$2$$

D
Either $$1$$ or $$2$$

Solution

The trial balance is prepared to fulfill the following objectives :
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

Bank overdraft is shown on the _____side of trial balance.

A
Credit

B
Debit

C
None

D
Both

Solution

Bank overdraft is shown on the credit side of the trial balance. Bank overdraft is a liability for the company as it is to be paid at a future date.
Question 3
1 / -0

A _______ is a schedule or list of balances of both debit and credit extracted from various accounts.

A
Profit & Loss Account

B
Balance Sheet

C
Cash Flow Statement

D
Trial Balance

Solution

A Trial balance is a schedule or list of balances of both debit and credit extracted from various accounts. It is basically a worksheet showing debit and credit balances of all ledger accounts and the total of both should be same thereby ensuring the arithmetical accuracy of books of accounts.
Question 4
1 / -0

Which of the following statements is correct about trial balance?

A
A Trial balance is a list of all entries made in the books of account

B
A Trial balance is a list of balances in all assets accounts

C
A Trial balance is another ledger account

D
A Trial balance is a list of balances in the cash account and all ledger accounts.

Solution

Trial balance is prepared to check and confirm the posting of all accounting entries. Trial balance is prepared with the help of ledger account. All the balances from each of ledger account is taken in a list in the debit and credit column. Both the sides of trial balance must be equal as accounting is based on the double entry system of accounting.
Question 5
1 / -0

An agreement of the trial balance does not prove that _____________.

A
All transactions have been correctly analyzed and recorded in the proper accounts

B
All transactions have been recorded in the books of original entry

C
Both (A) & (B)

D
None of above

Solution

The agreement of trial balance does not prove that all transactions have been correctly analysed and recorded in the proper accounts and all transactions have been recorded in the books of original entry. The books of accounts may tally in case of errors of complete omission or compensating errors.
Question 6
1 / -0

Which of the following is/are method for preparation of trail balance ?

A
Balances Method

B
Totals Method

C
Both (A) & (B)

D
None of the above

Solution

There are 3 methods of preparation of trial balance :-
1) Totals method - In this method all the totals of debit and credit columns of the ledger accounts are transferred are transferred to the trial balance and the closing balances are of no concern.
2) Balances method - Here only the closing balances of the ledger accounts are transferred of the relevant debit and credit side.
3) Totals-cum-balances Method - This method is a combination of totals method and balances method.
Question 7
1 / -0

After the preparation of ledgers, the next step is the preparation of ______________.

A
Trading accounts

B
Trial balance

C
Profit and loss account

D
None of the above

Solution

After the preparation of ledgers, the next step is the preparation of trial balance. After preparation of ledger accounts, all the balances of the ledger accounts are transferred to trial balance and it should tally. The trial balance checks the arithmetical accuracy of the books of accounts.
Question 8
1 / -0

The preparation of a trial balance is for locating -

A
Errors of complete commission

B
Clerical errors

C
Errors of principle

D
All of the above

Solution

The most important objective of trial balance is checking the accuracy of the accounts and detecting the errors. There are some errors that directly affect the trial balance i.e., the trial balance doesn't tallies while there are other errors when the trial balance may tally but it may not be accurate.
Question 9
1 / -0

Pending the location of errors in the books of accounts that affect the agreement of the Trial Balance, the difference disclosed is normally posted to ______________

A
Adjustment Account.

B
Holding Account.

C
Control Account.

D
Suspense Account.

Solution

Ideally, all the accounting errors have to be rectified before finalization of accounts. If the errors are not identified and pending for rectification, the difference in trial balance have to be transferred in a temporary account termed as "suspense a/c.
All rectification entries are do be done through suspense account.
Question 10
1 / -0

Which of the following statements is correct in relation to a trial balance?

A
It shows the financial position of a business

B
All the balances in the trial balance will be summarized on the business balance sheet

C
It is a list of balances and forms the starting point for the preparation of the business accounts

D
It is part of the published accounts of a business

Solution

Balance sheet and Income statement shows the financial position of a business.
Trial balance is a list of balances , from which financial statements are prepared i.e. balances will be summarized on the business balance sheet.
The preparation of business accounts starts with journal entries.
And trial balance cannot be published as accounts of business.

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Trial Balance Test 7

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Trial Balance Test 7

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Question 1

$$1$$ but not $$2$$

$$2$$ but not $$1$$

Both $$1$$ & $$2$$

Either $$1$$ or $$2$$

Solution

Question 2

Credit

Debit

None

Both

Solution

Question 3

Profit & Loss Account

Balance Sheet

Cash Flow Statement

Trial Balance

Solution

Question 4

A Trial balance is a list of all entries made in the books of account

A Trial balance is a list of balances in all assets accounts

A Trial balance is another ledger account

A Trial balance is a list of balances in the cash account and all ledger accounts.

Solution

Question 5

All transactions have been correctly analyzed and recorded in the proper accounts

All transactions have been recorded in the books of original entry

Both (A) & (B)

None of above

Solution

Question 6

Balances Method

Totals Method

Both (A) & (B)

None of the above

Solution

Question 7

Trading accounts

Trial balance

Profit and loss account

None of the above

Solution

Question 8

Errors of complete commission

Clerical errors

Errors of principle

All of the above

Solution

Question 9

Adjustment Account.

Holding Account.

Control Account.

Suspense Account.

Solution

Question 10

It shows the financial position of a business

All the balances in the trial balance will be summarized on the business balance sheet

It is a list of balances and forms the starting point for the preparation of the business accounts

It is part of the published accounts of a business

Solution

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