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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Trial Balance Quiz 4 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Trial Balance
Quiz 4
An agreement of the trial balance does not prove that _____________.
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All transactions have been correctly analyzed and recorded in the proper accounts
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All transactions have been recorded in the books of original entry
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Both (A) & (B)
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None of above
Explanation
The agreement of trial balance does not prove that all transactions have been correctly analysed and recorded in the proper accounts and all transactions have been recorded in the books of original entry. The books of accounts may tally in case of errors of complete omission or compensating errors.
Which of the following is/are method for preparation of trail balance ?
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Balances Method
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Totals Method
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Both (A) & (B)
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None of the above
Explanation
There are 3 methods of preparation of trial balance :-
1) Totals method - In this method all the totals of debit and credit columns of the ledger accounts are transferred are transferred to the trial balance and the closing balances are of no concern.
2) Balances method - Here only the closing balances of the ledger accounts are transferred of the relevant debit and credit side.
3) Totals-cum-balances Method - This method is a combination of totals method and balances method.
After the preparation of ledgers, the next step is the preparation of ______________.
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Trading accounts
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Trial balance
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Profit and loss account
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None of the above
Explanation
After the preparation of ledgers, the next step is the preparation of trial balance. After preparation of ledger accounts, all the balances of the ledger accounts are transferred to trial balance and it should tally. The trial balance checks the arithmetical accuracy of the books of accounts.
The preparation of a trial balance is for locating -
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Errors of complete commission
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Clerical errors
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Errors of principle
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All of the above
Explanation
The most important objective of trial balance is checking the accuracy of the accounts and detecting the errors. There are some errors that directly affect the trial balance i.e., the trial balance doesn't tallies while there are other errors when the trial balance may tally but it may not be accurate.
Pending the location of errors in the books of accounts that affect the agreement of the Trial Balance, the difference disclosed is normally posted to ______________
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Adjustment Account.
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Holding Account.
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Control Account.
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Suspense Account.
Explanation
Ideally, all the accounting errors have to be rectified before finalization of accounts. If the errors are not identified and pending for rectification, the difference in trial balance have to be transferred in a temporary account termed as "suspense a/c.
All rectification entries are do be done through suspense account.
Which of the following error will disturb the balancing of the trial balance?
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Recording in the purchases journal an in-voice for acquiring a non current asset for Rs. 60,000.
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Adding up the returns inwards journal as Rs. 11,400 instead of Rs. 2,12,600.
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Recording a sales invoice for Rs. 5,600 as Rs. 6,500 in the sales journal.
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Failing to record a purchase invoice for Rs. 54,000 in the purchases journal.
Explanation
Trial balance is prepared with the balances of the ledger accounts, if the balance of any ledger account is incorrect, the trial balance will not tally. Return inwards or sales return account always has a debit balance, when the balance of this account is understated, the credit side total of the trial balance will exceed the debit side total. This will lead to unstable trial balance.
Trial balance is prepared from ____________.
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Journal
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Ledger
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Cash book
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None of these
Explanation
Trial balance is prepared from ledger balances.
The trial balance checks ______________ .
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the honesty of the book - keeper.
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the honesty of the accountant
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the honesty of the cashier
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the arithmetical accuracy of the books of accounts
Explanation
Trial balance is the list of balances of all ledger accounts and cash book. It is an instrument for checking and testing the arithmetical accuracy of the posting of entries from journal to ledger. It is to check the accuracy of original records before preparing the final accounts so that the final account is error free, and going through books again after preparing final accounts will take a lot of time.
Which of the following is true about a trial balance?
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It lists down the balances of accounts
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It lists down the balances of a balance sheet
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It is a kind of financial statement
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It is not a part of accounting cycle
Explanation
A
trial balance
is a
list
of all the general ledger accounts (both revenue and capital) contained in the ledger of a business.
Which of the following errors will affect the Trial Balance?
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Errors of complete omission.
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Errors of recording in the books of original entry.
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Errors of posting involving the posting to the wrong account on the correct side with the correct amount.
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Errors of principle
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Compensating errors
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Correct recording in the cash book but not posted in the ledger at all.
Explanation
When a transaction has been correctly recorded in the cash book but not posted in the ledger at all, the trial balance will not tally.
For example, for cash received from debtors, the entry is passed in the cash book but omitted to be posted to the ledger of debtor's account. In this case the debtors balance should decrease, but since the posting is not made to the ledger, there will be no effect on the debtor's account balance, whereas the debit balance of cash account will increase. These balances are transferred to the trial balance, in which the debit balance will be more than the credit balance.
Which of the statements are true.
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Trial Balance is prepared after preparing the P& L A/c
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Trial Balance is prepared after preparing the Balance Sheet
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Trial Balance is prepared before preparing the Balance Sheet
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None of these
Explanation
A trial balance is prepared to record all the balances of debit and credit of the ledger. A balance sheet is prepared at the end of the year, but a trial balance can be prepared at the end of a month, quarter, etc.
Which of the following statements is correct?
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The trial balance is prepared after preparing the profit and loss account
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The trial balance shows only balances of assets and liabilities
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The trial balance shows only nominal account balances
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The trial balance has no statutory importance from the point of view of law
Explanation
The purpose of a trial balance is to prove that the value of all the debit value balances equal the total of all the credit value balances. If the total of the debit and the credit columns do not match then there is an error in the ledger accounts. This error must be found before a profit and loss statement and balance sheet can be produced. Apart from this there is no statutory importance of trial balance from the point of view of law.
The main purpose of preparing a trial balance is _________.
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To prepare a summary of all the balance
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To compare the debit balance with credit balance
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To locate all types of frauds
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To check the arithmetic accuracy of the ledger accounts
Explanation
Trial Balance is prepared by listing of all ledger balances. The statement in which the debit and credit balances are noted down and finally totaled up to ascertain if they are equal, is called Trial Balance.
The primary object of preparing the trial balance:
1) It is to check the accuracy of posting. If the trial balance agrees it proves that books are arithmetically accurate and both the aspects of all the transactions are correctly recorded.
2) It brings together the balances of all accounts at one place.
Income Tax appears in trial balance ____________ column.
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debit balance
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credit balance
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L.F.
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none of these
Explanation
Income tax is a payment and expenses. Expense are always debited. Hence Income tax appears in trial balance debit column.
The trial balance _________.
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is a formal financial statement
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is used to prove that there are no errors in the journal or ledger
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provides a listing of every account in the chart of accounts
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provides a listing of the balance of each account in active use
Explanation
The statement in which the debit and credit balances are noted down for each of the account is called a trial balance. Trial balance is prepared to check the arithmetical accuracy of the accounting. There are two main objective of preparation of trial balance:
1) It is a check on the accuracy of posting. If trial balance agrees, this proves that books are arithmetically correct.
2) It brings all ledger balances together at one place.This will help in preparing the profit & loss account and balance sheet.
Trial balance is a proof that _____________.
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Every transaction is recorded twice
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No error remains in the books of accounts
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Books are authentically and correctly written
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None of the Above
Explanation
Financial accounting is based on double entry system of accounting. For every debit there will be a credit and vice versa. Trial balance shows the total of debit and total of credit. Its a proof that all transactions are recorded both the sides.
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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