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By Accounting Mcqs 1 Comment

Which of the following statements is correct about Trial Balance?

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

D. A Trial Balance is a summary of all General Ledger Balances outstanding as on a particular date. All the debit balances from the ledger are shown on one side and all the credit balances are shown on the other side. A Trial Balance is prepared before Final Accounts are prepared. From the point of view of law, a Trial Balance has no statutory importance.

Related Mcqs:

  1. Debit balance = Credit balance in a trial balance indicates that:

    A. No error in recording transactions
    B. No error in posting entries to ledger accounts
    C. Account balances are correct
    D. Mathematically Capital+Liabilities=Assets

  2. Which of the following account with normal balance is shown at the debit side of a trial balance?

    A. Rent income account
    B. Creditors account
    C. Unearned income account
    D. Cash account

  3. Which of the following account with normal balance is shown at the credit side of a trial balance?

    A. Cash account
    B. Bank account
    C. Equipment account
    D. Accrued expenses account

  4. 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

  5. Which of the following will affect the agreement of a trial balance?

    A. Complete omission of a transaction
    B. Partial omission of a transaction
    C. Error of principle
    D. Compensating errors

  6. Which of the following is known as the base for preparing trial balance?

    A. Journal
    B. Cash account
    C. Ledger account
    D. Balance sheet

  7. Which of the following errors affects the agreement of a Trial Balance?

    A. Mistake in balancing an account
    B. Omitting to record a transaction entirely in the subsidiary books
    C. Recording of a wrong entry in the subsidiary books
    D. Posting an entry on the correct side but in the wrong account

  8. Trial balance is commonly prepared?

    A. Frequently during the year
    B. At the end of an accounting period
    C. At the end of a month
    D. At the end of a year

  9. Depreciation appearing in the Trial Balance should be?

    A. Debited to P&L A/c
    B. Shown as liability in Balance Sheet
    C. Reduced from related asset in Balance Sheet
    D. Both A. and C. above

  10. Closing stock appearing in the Trial Balance is shown in:

    A. Trading A/c and Balance Sheet
    B. Profit and Loss A/c
    C. Balance Sheet only
    D. Trading A/c only

The correct answer to the question: "Which of the following statements is correct about Trial Balance?" is "The Trial Balance has no statutory importance from the point of view of law".

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