Trial Balance – MCQs with Answers

Q1. What is a trial balance?
A. A statement showing balances of all ledger accounts
B. A summary of cash transactions
C. A financial statement
D. None of the above
 Answer: A

Q2. A trial balance is prepared to:
A. Prepare final accounts
B. Detect arithmetic errors
C. Check the accuracy of ledger postings
D. All of the above
 Answer: D

Q3. Which of the following is not shown in a trial balance?
A. Capital
B. Drawings
C. Closing stock
D. Sales
 Answer: C

Q4. If the debit and credit sides of the trial balance do not match, the difference is put in:
A. Capital Account
B. Trading Account
C. Suspense Account
D. Profit & Loss Account
 Answer: C

Q5. Errors not revealed by a trial balance are:
A. Errors of commission
B. Errors of omission
C. Errors of principle
D. Both B and C
 Answer: D

Q6. The trial balance is usually prepared:
A. At the end of the year
B. At the end of the month
C. After preparing financial statements
D. Before journalizing
 Answer: A

Q7. Which of the following errors affects the trial balance?
A. Posting ₹5,000 instead of ₹500
B. Omitting a transaction completely
C. Treating a capital expense as revenue expense
D. Recording in the wrong account
 Answer: A

Q8. Which of the following will appear on the debit side of a trial balance?
A. Sales
B. Capital
C. Purchases
D. Outstanding rent
 Answer: C

Q9. A suspense account is created when:
A. The trial balance tallies
B. The closing stock is missing
C. There is a mismatch in trial balance
D. Ledger accounts are incomplete
 Answer: C

Q10. Trial balance helps in:
A. Detecting errors
B. Preparing trading and profit & loss account
C. Preparing the balance sheet
D. All of the above
Answer: D

Q11. Trial balance is prepared from:
A. Cash Book
B. Journal
C. Ledger
D. Final Accounts
Answer: C

Q12. Which of the following accounts always shows a debit balance?
A. Capital
B. Bank Loan
C. Purchases
D. Sales
Answer: C

Q13. If the debit and credit totals of the trial balance are equal, it means:
A. There are no errors in accounts
B. There are no errors in recording
C. Arithmetic accuracy is ensured
D. All entries are correct
Answer: C

Q14. Which of the following accounts has a credit balance?
A. Rent paid
B. Wages
C. Capital
D. Salaries
Answer: C

Q15. Which error will not affect the trial balance?
A. Posting ₹1,000 to the wrong side of the ledger
B. Recording wrong amount in journal
C. Omission of a transaction
D. Entering a wrong total in trial balance
Answer: C

Q16. Suspense account appears in the:
A. Trading Account
B. Balance Sheet
C. Journal
D. Cash Book
Answer: B

Q17. Which of the following is the correct sequence?
A. Journal → Ledger → Trial Balance
B. Ledger → Journal → Trial Balance
C. Trial Balance → Journal → Ledger
D. Journal → Trial Balance → Ledger
Answer: A

Q18. Carriage inward is shown on:
A. Credit side of trial balance
B. Debit side of trial balance
C. Not in trial balance
D. Both sides
Answer: B

Q19. A trial balance is a:
A. Ledger
B. Statement
C. Journal
D. Book of original entry
Answer: B

Q20. The balance of which account is never shown in trial balance?
A. Purchases
B. Sales
C. Closing stock
D. Wages
Answer: C

Q21. Which of the following errors will be disclosed by a trial balance?
A. Error of omission
B. Error of principle
C. Compensating error
D. Wrong totaling of subsidiary books
Answer: D

Q22. What does a suspense account indicate?
A. Excess of income over expenditure
B. Unrecorded transactions
C. Difference in trial balance
D. Unpaid expenses
Answer: C

Q23. Which account is generally not balanced before preparing the trial balance?
A. Capital Account
B. Purchase Account
C. Sales Account
D. Profit and Loss Account
Answer: D

Q24. If the trial balance does not agree, which account is opened to balance it temporarily?
A. Adjustment Account
B. Reserve Account
C. Suspense Account
D. Trading Account
Answer: C

Q25. Trial balance is prepared to test the:
A. Financial performance
B. Arithmetical accuracy
C. Cash position
D. Tax liability
Answer: B

Q26. Which of the following will have only a debit balance?
A. Drawings
B. Capital
C. Sales
D. Commission received
Answer: A

Q27. A trial balance does not include:
A. Real accounts
B. Nominal accounts
C. Personal accounts
D. Closing stock
Answer: D

Q28. A debit balance in the bank column of the cash book indicates:
A. Overdraft
B. Cash in hand
C. Cash at bank
D. Credit balance
Answer: C

Q29. Sales Returns account has a:
A. Credit balance
B. Debit balance
C. Nil balance
D. Varying balance
Answer: B

Q30. Which account is shown on the debit side of trial balance?
A. Capital
B. Interest received
C. Sales
D. Salaries
Answer: D

Q31. Which of the following errors does not affect the trial balance?
A. Posting a wrong amount
B. Omitting an entry completely
C. Posting to the wrong side
D. Wrong balancing
Answer: B

Q32. Trial balance is prepared:
A. Daily
B. Monthly
C. Annually
D. At the end of an accounting period
Answer: D

Q33. Which of the following has a credit balance?
A. Drawings
B. Sales
C. Salaries
D. Rent paid
Answer: B

Q34. Purchase Returns account will have:
A. Debit balance
B. Credit balance
C. Nil balance
D. Variable balance
Answer: B

Q35. Which of the following is a real account?
A. Sales
B. Rent
C. Machinery
D. Salaries
Answer: C

Q36. If the trial balance totals are not matching, the accountant should:
A. Proceed to prepare final accounts
B. Ignore the difference
C. Locate and correct the error
D. Restart bookkeeping
Answer: C

Q37. Trial balance helps in preparation of:
A. Balance sheet
B. Profit & loss account
C. Final accounts
D. All of the above
Answer: D

Q38. A correct trial balance ensures:
A. No frauds
B. All accounts are accurate
C. Arithmetic accuracy
D. All entries are legal
Answer: C

Q39. Prepaid expenses are shown on:
A. Credit side of trial balance
B. Debit side of trial balance
C. Not shown in trial balance
D. Trading account
Answer: B

Q40. Which of the following has normally a debit balance?
A. Bank overdraft
B. Discount received
C. Rent paid
D. Capital
Answer: C

Q41. Depreciation is shown on which side of the trial balance?
A. Credit
B. Debit
C. Both
D. None
Answer: B

Q42. Commission received in advance appears in:
A. Trial balance debit side
B. Trial balance credit side
C. Trading account
D. Not in trial balance
Answer: B

Q43. Discount allowed is a:
A. Real account
B. Nominal account
C. Personal account
D. None
Answer: B

Q44. Wages paid for installation of machinery should be:
A. Debited to wages account
B. Debited to machinery account
C. Credited to wages account
D. Not recorded
Answer: B

Q45. Furniture purchased on credit is recorded in:
A. Journal proper
B. Purchase book
C. Cash book
D. Sales book
Answer: A

Q46. Trial balance assists in preparation of:
A. Journals
B. Ledgers
C. Final Accounts
D. Bank Statement
Answer: C

Q47. Which of the following has a credit balance?
A. Debtors
B. Creditors
C. Drawings
D. Prepaid expenses
Answer: B

Q48. Which of the following is not an objective of trial balance?
A. Detecting errors
B. Preparing final accounts
C. Ensuring cash balance
D. Ensuring arithmetical accuracy
Answer: C

Q49. Trial balance includes:
A. Only real accounts
B. Only nominal accounts
C. All personal, real, and nominal accounts
D. None of the above
Answer: C

Q50. When trial balance is balanced, it means:
A. No errors at all
B. Only compensating errors exist
C. Books are arithmetically correct
D. Financial statements are ready
Answer: C

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