VS TRIAL BALANCE
ONE WORD TO ONE SENTENCE QUESTIONS
Q.1 Define trial balance .
Ans Trial balance is statement of debit and credit balances extracted from the ledger accounts and cash book
Q.2 Why the trial balance is prepared ?
Ans Trial balance is prepared to check the arithmetical accuracy of account books .
Q.3 Give two advantages of trial balance ?
Ans 1. The arithmetical accuracy of accounts can be checked by preparing trial balance .
2. The dual aspect of each transaction can be checked by trial balance.
Q.4 Give two limitations of trial balance ?
Ans 1. Error of admission cannot be located by trial balance .
2. Error of principle cannot be located by trial balance .
Q.5 Name the methods of preparing trial balance .
Ans 1. Total method 2. Balance method 3. Compound method
Q.6 What is the treatment of closing stock in trial balance?
Ans Generally closing stock is not entered in trial balance but if adjusted purchases is given .closing stock will be shown in the trial balance
Q.7 What are errors of omission ?
Ans If the transaction is wholly or partly omitted to be recorded in book of accounts is known as errors of omission
Q.8 Explain errors of commission ?
Ans The errors which are due to the carelessness of accounting staff are known as errors of commission e.g wrong totalling or wrong passing of accounts .
Q.9 Explain errors of principle .
Ans Whenever any income or expenditure is not properly allocated between capital and revenue is known as error of principle
Q.10 What are compensating errors ?
Ans Errors canceled by themselves are called compensating errors; such errores neutralize the effect of the other errors committed calier
FILL IN THE BLANKS
1. A suspense account is created when the __________of a trial balance do not agree.
2. The trial balance is a main evidence of the _________of the book-keeping
3. Errors canceled by themselves are called __________
4. If purchase of furniture is recorded in the purchase book, It is an error of _________
5. Balance of ___________accounts are posted to the trial balance.
Ans. 1. Total 2 accuracy 3. Compensating 4. Principle 5. Ledger.
TRUE OR FALSE STATEMENT
1. Trial Balance is a part of the ledger.
2. A trial balance with suspense account is trial incorrect.
3. Error of Principle causes disagreement of a trial balance.
4. Errors of principle rectified using suspense accounts
5. Closing Stock does not usually appear in the trial balance.
Ans. 1. False 2. True 3. False 4. False 5. True .
MULTIPLE CHOICE QUESTIONS
1. A trial balance is a :
A. Real account
B. Nominal account
C. Personal account
D. List of balance
2. Trial Balance is prepared to detect :
A. Errors of omission
B. Errors of principle
C. Errors of Commission
D. Compensating errors
3. The trial balance checks :
A. The arithmetical accuracy of books
B. The honesty of the book keeper
C. Accuracy of the book keeper
D. None of these
4. Which of the following errors will not affect the trial balance.
A. Wrong balancing of an account
B. Wrong totalling of an account
C. Error of omission
D. Writing wrong amount but on correct side
5. A trial Balance is
A. A statement
B. A summary
C. An account
D. None of these
6. Preparation of a Trial Balance is
A. Compulsory
B. Optional
C. Compulsory or optional
D. None of these
7. A Trial Balance shows
A. Only credit balance
B. Only debit balance
C. Both debit and credit balances
D. Either debit or credit balance
8. Trial Balance is a list of the balance of
A. All Accounts
B. Only personal and real Account
C. Only Real and Nominal Account
D. Only personal Accounts
9. Which item shows a debit balance in the trial balance ?
A. Purchase Return
B. Salary Outstanding
C. Sales
D. Prepaid Expenses
10. A machine is purchased for Rs. 15000 which was wrongly recorded in the Purchase account. Due to this error trial balance will show
A. Trial difference of Rs. 15000
B. Not show any difference
C. The difference of Rs. 30,000
D. Difference of Rs. 7500.
Ans. 1. D 2. C 3. A 4. D 5.A 6. B 7. C 8. A 9. D 10. B .