The Accounting Cycle of a Merchandising Business

The Trial Balance is used to check the accuracy of what?

• Balance Sheet balances

• Cash Flow balances

• General Ledger Account Balances

• Income Statement balances

Which account in the Trial Balance represents a credit balance?

• Assets

• Liability

• Net Loss

• Plant, Property and Equipment (PPE)

A trial balance prepared after taking into account the effect of adjusting entries is known as?

• Adjusted Trial Balance

• Financial Trial Balance

• Normal Balance

• Unadjusted Trial Balance

What is the account that normally appears DEBIT in a Trial Balance?

• Owner's Capital

• Owner's Drawing

• Net Income

• Net Loss

Why does a business prepare a Trial Balance?

• to calculate the Net Profit or Net Loss of a company

• to check cash balances

• to check the arithmetical accuracy of the ledgers

• to show the financial performance of a business

Which of the following is NOT true about a Trial Balance?

• A list of all ledger accounts where their balances are extracted from the General Ledger

• It reflects the Net Profit of the company

• It reflects all the debit and credit balances of all accounts in the General Ledger

• The heading reflects the company's name and the date of preparation

When do you prepare a Trial Balance?

• At the end of the year

• At the end of the accounting period

• At the end of the month

• Frequently in a year

What is the use of a trial balance?

• It is a financial statement

• It records the balance of the balance sheet

• It does not contribute to the accounting cycle

• It records balances of accounts

When debit balance is equal to the credit balance, then the trial balance means?

• Account balances are correct

• Mathematically, Assets = Liabilities + Capital

• No mistake in recording transactions

• No mistake in posting entries in the ledger Accounts

What accounting book is used in the preparation of a Trial Balance?

• General Ledger accounts

• General Journal

• Special Journal

• Subsidiary Ledger