# Trial Balance MCQ Commerce

50 Questions 30 Mins

When all ledger balances are combined into equal debit and credit account column totals, a trial balance is a form of accounting worksheet. A trial balance is prepared by a company on a regular basis, generally at the conclusion of each reporting period. The primary goal of a trial balance is to ensure that the entries in a company's bookkeeping system are mathematically correct.

#### The mechanism of a Trial Balance

The purpose of preparing a trial balance for a company is to discover any mathematical errors in the double-entry accounting system. The trial balance is deemed balanced if the total debits match the total credits, and the ledgers should be error-free. However, this does not rule out the possibility of accounting system errors. For example, poorly categorized transactions or those that are simply absent from the system might nevertheless represent major accounting errors that the trial balance technique would overlook.

#### Salient features of a Trial Balance

• A trial balance is a worksheet with two columns, one for debits and the other for credits, that confirms that a business's bookkeeping is mathematically proper.
• The debits and credits account for all of a company's business transactions during a certain time period, including the sum of accounts such as assets, costs, liabilities, and revenues.
• Although the debits and credits of a trial balance must be equal to guarantee that there are no mathematical errors, accounting systems may nevertheless have faults or errors.

#### Pre-requisites of preparing a Trial Balance

Ledger accounts are used by businesses to keep track of transactions. Before being included in a trial balance, ledger accounts may be debited or credited based on company activities. It's possible that many accounts have recorded multiple transactions. As a result, the final balance for each ledger account on the trial balance worksheet is the sum of all debits and credits recorded to that account as a result of all related business activity.

Following are some of the multiple choice questions on the Trial Balance with answers that will help the students in developing their knowledge.

## Trial Balance MCQ

### 1. A suspense account facilitates the preparation of_____ even if the ____ has not been tallied.

• Trial Balance, Financial Statements
• Ledger, Trial Balance
• Trial Balance, Ledger
• Financial Statements, Trial Balance.

### 2. Which account will have a zero balance after a company has journalized and posted closing entries?

• Service Revenue.
• Supplies.
• Prepaid Insurance.
• Accumulated Depreciation.

### 3. Balances of the Accounts are transferred to:

• Trial Balance
• Profit & Loss Account
• Balance Sheet

### 4. Which of the following entries records the utility bill incurred but not paid from the water company?

• Debit Utilities Expense; credit Accounts Payable
• Debit Accounts Payable; credit Utilities Payable
• Debit Accounts Payable; credit Cash
• Debit Utilities Payable; credit Accounts Receivable

### 5. Which of the following is a temporary account?

• The dividends account
• An asset account
• A liability account
• A stockholders' equity account

### 6. The last step in the accounting cycle is to

• record transactions in a journal.
• prepare a work sheet.
• journalize and post closing entries.
• prepare a post-closing trial balance.

### 7. Bhandari’s trial balance was showing difference of ₹ 5,000 (debit side exceeds). While checking of total sales register, he found that the total is over – cast by ₹ 2,000. After correction in sales register what would be the difference in his trial balance.

• Debit side exceeds by ₹7,000
• Debit side exceeds by ₹5,000
• Debit side exceeds by ₹3,000
• Credit side exceeds by ₹3,000

### 8. Salaries paid ₹ 4,500 is shown in credit side of trial balance. In the total of trial balance the debit side will be short by -----------

• Short by ₹ 4,500
• Excess by ₹ 4,500
• Short by ₹9,000
• Excess by ₹ 9,000.

### 9. Which of the following in Trial Balance is contradictory to each other?___________.

• Inventory and Drawings
• Sales and Purchase Return
• Carriage Inward and Outward

• Principle
• Arithmetical
• Clerical
• None

### 11. In 2013, Abbott Company performs work for a customer and bills the customer \$10,000; it also pays expenses of \$3,000. The customer pays Abbott in 2014. If Abbott uses the cash basis of accounting, then Abbott will report:

• revenue of \$10,000 in 2013.
• revenue of \$10,000 in 2014.
• expenses of \$3,000 in 2014.
• net income of \$7,000 in 2013.

### 12. Which types of accounts will appear in the post-closing trial balance and have a balance?

• Permanent accounts.
• Temporary accounts.
• Expense accounts.
• None of the above.

### 13. Little Corporation received \$5,000 from a customer for whom it is to perform work in the future, debiting Cash and crediting Unearned Revenue. At the end of the accounting period, Little has earned \$2,000 of the revenue. The adjusting entry will require a:

• debit to Cash for \$2,000.
• debit to Service Revenue for \$2,000.
• credit to Service Revenue for \$2,000.
• credit to Service Revenue for \$3,000.

• True
• False

### 15. Accounts used to accumulate information from one fiscal period to the next are

• revenue accounts.
• permanent accounts.
• temporary accounts.
• expense accounts.

### 16. After the closing entries are posted, the owner’s capital account balance should be the same as shown

• on the balance sheet for the fiscal period.
• in the work sheet’s Balance Sheet Debit column.
• in the work sheet’s Balance Sheet Credit column.
• in the work sheet’s Income Statement Debit column.

### 17. The accounts that appear on the post-closing trial balance are

• assets, liabilities, and owner’s capital.
• revenue, expenses, and owner’s drawing.
• all accounts in the chart of accounts.
• all temporary accounts.

### 18. After closing entries are posted, the balance in the owner’s drawing account should be

• a debit.
• zero.
• a credit.
• none of these.

### 19. Classify the item : Trade Receivables

• Assets
• Liabilities
• Owner's Equity
• Revenues
• Expenses

• Debit
• Credit

• DR
• CR

• True
• False

### 23. Trial Balance is a statement which shows the ------- or the -------- of all the accounts.

• (a) Opening Balance, Closing Balance
• (b) Debit Balances, Credit Balances
• (c) Positive Balances, Negative Balance
• (d) Balances, Totals

### 24. When the amounts of a transaction must be recorded in a minimum of two accounts-

• double-entry
• debit
• credit
• accounting equation

• Omission
• Commission
• Principle
• Reverse

• True
• False

• True
• False

### 28. Adjustments for unearned revenues:

• decrease liabilities and increase revenues.
• increase liabilities and increase revenues.
• increase assets and increase revenues.
• decrease revenues and decrease assets.

### 29. Adjustments for prepaid expenses:

• decrease assets and increase revenues.
• decrease expenses and increase assets.
• decrease assets and increase expenses.
• decrease revenues and increase assets.

### 30. Expenses incurred in one fiscal period but not paid until a later fiscal period.

• accrual
• accrued interest expense
• accrued expenses
• deferral

### 31. Payments for goods or services which have not yet been received.

• accrued interest expense
• accrued expenses
• deferred expenses

### 32. We purchased Indian Insurance (Prepaid Insurance) on June 1st, 2020 for \$252. What is the Insurance Expense as of December 31, 2020?

• \$105
• \$50.40
• \$147
• none of the above

### 33. Refers to the allocation of the cost of the asset over its estimated useful life.

• Consumption
• Deterioration
• Contra Asset
• Depreciation

### 34. Interest incurred but not yet paid.

• accrual
• accrued interest expense
• accrued expenses
• deferral

• agility
• flexibility
• muscles
• All of above

### 36. Where do you use creative movement?

• Dance routines
• Gymnastics
• Yoga
• All Of above

• true
• false

• 1
• 2
• 3
• 4

### 39. What is balance ?

• to stand up
• are an important part of creative performance.
• way we move around
• different types, speeds and levels of travelling movements

• true
• false

• True
• False

• True
• False

### 43. The journal entry to close Income Summary when there is a net income is

• debit Sales; credit Income Summary.
• debit owner’s capital; credit Income Summary.
• debit owner’s capital; credit Sales.
• debit Income Summary; credit owner’s capital.

### 44. Temporary accounts begin each new fiscal period with a

• debit balance.
• credit balance.
• zero balance.
• d. balance equal to the net income.

### 45. When the total expenses are greater than the total revenues,

• the Income Summary account has a credit balance.
• the Income Summary account has a debit balance.
• debits equal credits.
• none of these.

• True
• False

• True
• False

• True
• False

### 49. Income Summary is a(n)

• asset account.
• liability account.
• temporary account.
• permanent account.

• True
• False