TRIAL BALANCE

Which of the following best describes a trial balance?

• It shows the financial position of a business

• It shows the profit or loss of a business

• It is a list of ledger account balances in the book

• It shows all the entries in the books

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

• an asset

• an expenses

• drawings

• income

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

• Trade payable

• Trade receivable

• owner equity

• bank loan

Which account has usually debit balance?

• Sales

• Purchase

• Return outwards

• Discount received

Which of the following accounts could have credit balance?

• cash

• motor vehicles

• bank

• return inwards

Why does a business prepare a Trial Balance?

• To calculate the profit and loss

• To check the cash and bank balance

• To check the arithmetical accuracy of the ledgers

• To show the financial position

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 ledger account is verified through?

• journal

• trial balance

• ledger

• none of these

Numerous mistakes can exist even though the Trial Balance totals are in agreement.

• True

• False

If bank account has a credit balance, this is a/an ________ in the business

• Expenses

• Income

• Asset

• Liability