TRIAL BALANCE AND RECTIFICATION OF ERRORS

The basic purpose of preparing a trial balance is:

• to find out profit of the business

• to show financial position of the business

• to test arithmetical accuracy of the ledger

• to calculate net purchases of the business

Which of the following is correct about an agreed trial balance.

• both debit and credit aspects of each transaction have been recorded

• the books are arithmetically correct

• the debit and credit columns of trial balance have been correctly totalled

• all of the above

The type of account with a normal credit balance is?

• An asset

• An expense

• Drawing

• Revenue

Which one of the following account would usually have a debit balance?

• Account Payable

• Cash

• Owner Equity

• Bank Loan

A Trial balance which shows equal totals for both debit and credit columns?

• Shows that there must be more than one error within the bookkeeping system

• Shows that the bookkeeping system is free of errors

• Shows that the arithmetic is correct, but errors may still be present in the bookkeeping system

• Shows that there is only one error within the bookkeeping system

Which of the following accounts normally has credit balance?

• Wages Outstanding

• Motor vehicles

• Prepaid Rent

• Return Inwards

Is it true that the trial balance totals should agree?

• Yes, always

• No, because it is not a balance sheet

• Yes, except where the trial balance is extracted at the year end

• No, there are sometimes good reasons why they differ

The arithmetical accuracy of books of account is verified through?

• Journal

• Trial Balance

• Ledger

• None of the given options

Which of the following best describes a Trial balance?

• Shows all the entries in the books

• It is a list of total / balances of books

• Shows the financial position of a business

• It is a special account

Preparation of Trial Balance helps to deduction of?

• Error of Principle

• Clerical Errors

• Error of whole Omission

• Compensating Errors