Trial Balance Test 8

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Trial Balance Test 8

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Question 1
1 / -0

Which of the following error will disturb the balancing of the trial balance?

A
Recording in the purchases journal an in-voice for acquiring a non current asset for Rs. 60,000.

B
Adding up the returns inwards journal as Rs. 11,400 instead of Rs. 2,12,600.

C
Recording a sales invoice for Rs. 5,600 as Rs. 6,500 in the sales journal.

D
Failing to record a purchase invoice for Rs. 54,000 in the purchases journal.

Solution

Trial balance is prepared with the balances of the ledger accounts, if the balance of any ledger account is incorrect, the trial balance will not tally. Return inwards or sales return account always has a debit balance, when the balance of this account is understated, the credit side total of the trial balance will exceed the debit side total. This will lead to unstable trial balance.
Question 2
1 / -0

Trial balance is prepared from ____________.

A
Journal

B
Ledger

C
Cash book

D
None of these

Solution

Trial balance is prepared from ledger balances.
Question 3
1 / -0

The trial balance checks ______________ .

A
the honesty of the book - keeper.

B
the honesty of the accountant

C
the honesty of the cashier

D
the arithmetical accuracy of the books of accounts

Solution

Trial balance is the list of balances of all ledger accounts and cash book. It is an instrument for checking and testing the arithmetical accuracy of the posting of entries from journal to ledger. It is to check the accuracy of original records before preparing the final accounts so that the final account is error free, and going through books again after preparing final accounts will take a lot of time.
Question 4
1 / -0

Which of the statements are true.

A
Trial Balance is prepared after preparing the P& L A/c

B
Trial Balance is prepared after preparing the Balance Sheet

C
Trial Balance is prepared before preparing the Balance Sheet

D
None of these

Solution

A trial balance is prepared to record all the balances of debit and credit of the ledger. A balance sheet is prepared at the end of the year, but a trial balance can be prepared at the end of a month, quarter, etc.
Question 5
1 / -0

Which of the following is true about a trial balance?

A
It lists down the balances of accounts

B
It lists down the balances of a balance sheet

C
It is a kind of financial statement

D
It is not a part of accounting cycle

Solution

A trial balance is a list of all the general ledger accounts (both revenue and capital) contained in the ledger of a business.
Question 6
1 / -0

Which of the following errors will affect the Trial Balance?

A
Errors of complete omission.

B
Errors of recording in the books of original entry.

C
Errors of posting involving the posting to the wrong account on the correct side with the correct amount.

D
Errors of principle

E
Compensating errors

Solution

When a transaction has been correctly recorded in the cash book but not posted in the ledger at all, the trial balance will not tally.
For example, for cash received from debtors, the entry is passed in the cash book but omitted to be posted to the ledger of debtor's account. In this case the debtors balance should decrease, but since the posting is not made to the ledger, there will be no effect on the debtor's account balance, whereas the debit balance of cash account will increase. These balances are transferred to the trial balance, in which the debit balance will be more than the credit balance.
Question 7
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

The purpose of a trial balance is to prove that the value of all the debit value balances equal the total of all the credit value balances. If the total of the debit and the credit columns do not match then there is an error in the ledger accounts. This error must be found before a profit and loss statement and balance sheet can be produced. Apart from this there is no statutory importance of trial balance from the point of view of law.
Question 8
1 / -0

The main purpose of preparing a trial balance is _________.

A
To prepare a summary of all the balance

B
To compare the debit balance with credit balance

C
To locate all types of frauds

D
To check the arithmetic accuracy of the ledger accounts

Solution

Trial Balance is prepared by listing of all ledger balances. The statement in which the debit and credit balances are noted down and finally totaled up to ascertain if they are equal, is called Trial Balance.

The primary object of preparing the trial balance:
1) It is to check the accuracy of posting. If the trial balance agrees it proves that books are arithmetically accurate and both the aspects of all the transactions are correctly recorded.
2) It brings together the balances of all accounts at one place.
Question 9
1 / -0

Which of the following best describes a trial balance?

A
It is a list of balances on the books.

B
It is a special account.

C
Shows the financial position of a business.

D
Shows all the entries in the books.

Solution

The fundamental principle of the double entry system is that for every debit there is a credit and vice versa. The statement in which the debit and credit balances of each account are noted down and finally totaled up is called a Trial Balance.
There are two main objectives of preparing trial balance:
1) It is a check on the accuracy of posting. If the debit side and credit sides agrees, it proves that books are arithmetically correct.
2) It brings all the accounts at one place to facilitate the preparation of financial statement.
Question 10
1 / -0

Income Tax appears in trial balance ____________ column.

A
debit balance

B
credit balance

C
L.F.

D
none of these

Solution

Income tax is a payment and expenses. Expense are always debited. Hence Income tax appears in trial balance debit column.

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Trial Balance Test 8

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Trial Balance Test 8

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Question 1

Recording in the purchases journal an in-voice for acquiring a non current asset for Rs. 60,000.

Adding up the returns inwards journal as Rs. 11,400 instead of Rs. 2,12,600.

Recording a sales invoice for Rs. 5,600 as Rs. 6,500 in the sales journal.

Failing to record a purchase invoice for Rs. 54,000 in the purchases journal.

Solution

Question 2

Journal

Ledger

Cash book

None of these

Solution

Question 3

the honesty of the book - keeper.

the honesty of the accountant

the honesty of the cashier

the arithmetical accuracy of the books of accounts

Solution

Question 4

Trial Balance is prepared after preparing the P& L A/c

Trial Balance is prepared after preparing the Balance Sheet

Trial Balance is prepared before preparing the Balance Sheet

None of these

Solution

Question 5

It lists down the balances of accounts

It lists down the balances of a balance sheet

It is a kind of financial statement

It is not a part of accounting cycle

Solution

Question 6

Errors of complete omission.

Errors of recording in the books of original entry.

Errors of posting involving the posting to the wrong account on the correct side with the correct amount.

Errors of principle

Compensating errors

Solution

Question 7

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

Question 8

To prepare a summary of all the balance

To compare the debit balance with credit balance

To locate all types of frauds

To check the arithmetic accuracy of the ledger accounts

Solution

Question 9

It is a list of balances on the books.

It is a special account.

Shows the financial position of a business.

Shows all the entries in the books.

Solution

Question 10

debit balance

credit balance

L.F.

none of these

Solution

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