Tag: develop the skill of preparing trial balance by balance method

Questions Related to develop the skill of preparing trial balance by balance method

Income Tax appears in trial balance ____________ column.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. debit balance

  2. credit balance

  3. L.F.

  4. none of these

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Correct Option: A
Explanation:

Income tax is a payment and expenses. Expense are always debited. Hence Income tax appears in trial balance debit column. 

Drawing account appears in ________ column of the trial balance.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. L.F

  2. debit balance

  3. credit balance

  4. none of these

Show answer
Correct Option: B
Explanation:

Drawing is a personal withdrawal done by the proprietor. All personal drawings are debited to the drawing account. 

Drawing account will always have a debit balance. Drawing account must be shown in the debit side of trial balance. 

State whether  the following statements are True or False:
The total of purchase book casts short by Rs.1,000/- will not affect the trial balance.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

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Correct Option: B

State whether  the following statements are True or False:
Preparation of trial balance helps in locating an error of principle.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmetical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process, which shows final position of all accounts and helps in preparing the final statements.

When a trial balance does not tally (that is, the totals of debit and credit columns are not equal),  at least one error has occurred. The error (or errors) may have occurred at one of those stages in the accounting process: (1) totaling of subsidiary books, (2) posting of journal entries in the ledger, (3) calculating account balances, (4) carrying account balances to the trial balance, and (5) totaling the trial balance columns. 
Hence, preparation of trial balance helps in locating errors, not only error of principle.

State whether the following statements are True or False.
In Trial balance Opening Stock is recorded in credit balance column.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

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Correct Option: B

State whether the following statement is True or False.
Capital balance is not included in a trial balance.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements. Ledger balances are segregated into debit balances and credit balances. Asset and expense accounts appear on the debit side of the trial balance whereas liabilities, capital and income accounts appear on the credit side. If all accounting entries are recorded correctly and all the ledger balances are accurately extracted, the total of all debit balances appearing in the trial balance must equal to the sum of all credit balances.

State whether the following statement is True or False.
In preparation of gross trial balance, ledger account balances are extracted.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

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Correct Option: B

State whether the following statement is True or False.
Trial balance is prepared on a separate sheet of paper.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

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Correct Option: A

State whether the following statement is True or False.
Net trial balance is more popular than gross trial balance.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

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Correct Option: A

State whether the following statement is True or False.
Closing stock usually does not appear in the trial balance.

elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

  1. True

  2. False

Show answer
Correct Option: A