Preparing a Trial Balance: The Final Stage of the Accounting Cycle

What is the final stage of the accounting cycle compared to in the video?

• A teacher grading papers

• A gardener planting seeds

• A builder constructing a house

• A chef preparing a meal

Why is it important to prepare a trial balance?

• To calculate taxes

• To record daily transactions

• To summarize ledger balances for stakeholders

• To ensure all dishes are cooked

In the example of Daniel Traders, what does a net debit balance indicate?

• No transactions recorded

• Credit side is greater

• Debit side is greater

• Both sides are equal

What method is commonly used to prepare a trial balance?

• Simple method

• Gross method

• Balanced method

• Net method

What does a trial balance prove about the ledger entries?

• They are all profitable

• They are arithmetically accurate

• They are recorded in a single entry system

• They are ready for tax submission

How can a businessman use a trial balance effectively?

• To calculate employee salaries

• To prepare meals for guests

• To design marketing strategies

• To compare account balances over time

What is a common characteristic of real accounts in a trial balance?

• They show a credit balance

• They show a debit balance

• They have no balance

• They are always zero

What type of balance do nominal accounts typically show for expenses?

• Negative balance

• Credit balance

• Zero balance

• Debit balance

What does a credit balance in a personal account indicate?

• The person is a debtor

• The account is inactive

• The person is a creditor

• The account is closed

What should be done if the trial balance totals do not match?

• Submit the balance as is

• Ignore the discrepancy

• Recheck the ledger entries for errors

• Prepare a new trial balance