MCQs on Trial Balance

MCQs on Trial Balance ( Answers at the end)

A) Sales book undercast by Rs. 50,000

B) Purchase of Machinery Rs. 50,000 debited to Purchases A/c

C) Rs. 50,000 cash received from Ram credited to Shyam

D) Closing Stock Rs. 50,000 shown in Trial Balance2. Which of the following is NOT included in Trial Balance?

A) Opening Stock

B) Closing Stock

C) Opening Capital

D) Drawings3. Trial Balance is prepared to check:

A) Arithmetical accuracy only

B) Existence of all errors

C) Financial position

D) Profitability4. If Suspense A/c shows credit balance of Rs. 12,000 after rectification of one-sided errors, what does it indicate?

A) Debit total exceeds credit by Rs. 12,000

B) Credit total exceeds debit by Rs. 12,000 originally

C) Books are now tallied

D) Error still exists of Rs. 24,0005. Goods worth Rs. 5,000 distributed as free samples is omitted from Trial Balance. Effect?

A) No effect on Trial Balance agreement

B) Trial Balance will not tally

C) Gross Profit will be overstated

D) Both A & C6. The Trial Balance total is Rs. 8,70,430 (as per your PDF). If Closing Stock is Rs. 35,000, where it will appear?

A) Only in Trading A/c Credit

B) Only in Balance Sheet Asset

C) Both Trading Cr and Balance Sheet Asset

D) Trial Balance Debit7. Which error will affect Trial Balance agreement?

A) Compensating error

B) Error of principle

C) Error of partial omission

D) Error of complete omission8. Sales Book total Rs. 10,000 posted as Rs. 1,000 to Sales A/c. Impact on Trial Balance?

A) Credit side short by Rs. 9,000

B) Debit side short by Rs. 9,000

C) No effect

D) Credit side excess by Rs. 9,0009. Provision for Bad Debts is a:

A) Debit balance in Trial Balance

B) Credit balance in Trial Balance

C) Not shown in Trial Balance

D) Asset10. Which account normally has credit balance?

A) Carriage Inwards

B) Returns Outwards

C) Returns Inwards

D) Bad Debts11. Trial Balance method of preparing Final Accounts is called?

A) Journal method

B) Statement method

C) Ledger method

D) Balancing method12. A Trial Balance includes: Cash Rs. 5000 (Dr), Capital Rs. 5000 (Cr). Later found Cash includes Rs. 500 fake note. Corrected Trial Balance?

A) Still tallies

B) Will not tally by Rs. 500

C) Will not tally by Rs. 1000

D) Profit will be Rs. 500 less13. Which is a limitation of Trial Balance?

A) It does not disclose error of duplication

B) It does not disclose error of commission if amounts differ

C) It discloses all errors

D) Both A & B14. If Purchase Returns Rs. 2,500 is shown as Returns Inwards, effect on Gross Profit?

A) No effect

B) Gross Profit reduced by Rs. 5,000

C) Gross Profit reduced by Rs. 2,500

D) Gross Profit increased by Rs. 5,00015. Suspense Account is opened when:

A) All errors are rectified

B) Trial Balance does not tally

C) Profit is not calculated

D) Closing stock not valued16. Wages paid for installation of Machinery Rs. 1,200 debited to Wages A/c. This is:

A) Error of omission

B) Error of commission

C) Error of principle - will not affect Trial Balance

D) Compensating error17. Opening Stock Rs. 60,000, Purchases Rs. 2,50,000, Sales Rs. 3,00,000. If Closing Stock is overvalued by Rs. 10,000, Gross Profit will be?

A) Overstated by Rs. 10,000

B) Understated by Rs. 10,000

C) No effect

D) Overstated by Rs. 20,000*18. In your Trial Balance PDF, Interest Rs. 2,000 (Dr) is: *

A) Interest Received

B) Interest Paid

C) Cannot determine

D) Accrued Interest19. Which of the following will be shown on debit side of Trial Balance?

A) Provision for Depreciation

B) Discount Received

C) Interest Received

D) Prepaid Insurance20. Creditors Rs. 2,50,000 (Cr) in Trial Balance means:

A) Amount payable to suppliers

B) Amount receivable from customers

C) Capital

D) Loan21. A Trial Balance with totals Rs. 8,70,430. Rs. 3,500 Bad Debts is written off. After adjustment, Debtors will be Rs. 50,000-3,500. Provision 5% will be calculated on:

A) Rs. 50,000

B) Rs. 46,500

C) Rs. 48,000 (if further bad debts 2000)

D) None22. If a transaction is completely omitted, Trial Balance will:

A) Not tally

B) Still tally

C) Show difference equal to amount omitted

D) Show Suspense23. Purchase of Furniture Rs. 22,500 (Dr) in Trial Balance is a:

A) Revenue Expenditure

B) Capital Expenditure - Fixed Asset

C) Deferred Revenue

D) Current Asset24. Rent Received Rs. 10,380 (Cr) includes Rs. 6,000 advance. Correct Rent for P&L is:

A) Rs. 16,380

B) Rs. 4,380

C) Rs. 10,380

D) Rs. 6,00025. Trial Balance is a:

A) Account

B) Statement

C) Ledger

D) Journal26. Which error causes difference in Trial Balance despite equal debit/credit?

A) Wrong balancing of account

B) Error of principle

C) Complete omission

D) Compensating errors27. Commission Rs. 500 (Dr) in Trial Balance means:

A) Commission Received

B) Commission Paid / Given

C) Accrued Commission

D) Unearned Commission28. Bills Receivable Rs. 3,000 (Dr) indicates:

A) Liability

B) Asset - Amount to be received

C) Expense

D) Income29. If Sales Book is overcast by Rs. 5,000, rectification will require:

A) Debit Sales Rs. 5,000

B) Credit Sales Rs. 5,000

C) Debit Suspense Rs. 5,000

D) No entry30. Cash in Hand Rs. 22,500 and Cash in Bank Rs. 35,000. Total Liquid Cash in Balance Sheet will be:

A) Rs. 22,500

B) Rs. 35,000

C) Rs. 57,500

D) Rs. 12,50031. Trial Balance does not include:

A) Drawings

B) Closing Stock normally

C) Opening Stock

D) Purchases32. If Trial Balance debit total is Rs. 8,70,430 and credit Rs. 8,60,430, Suspense A/c will have:

A) Rs. 10,000 Dr

B) Rs. 10,000 Cr

C) Rs. 20,000 Dr

D) Rs. 20,000 Cr33. Prepaid Insurance Rs. 200 is:

A) Expense

B) Asset - Current Asset

C) Liability

D) Income34. Return Inwards Rs. 2,000 will be deducted from:

A) Purchases

B) Sales

C) Debtors

D) Creditors35. Which pair will have opposite balances?

A) Bad Debts and Provision for Bad Debts

B) Debtors and Creditors

C) Sales and Purchases

D) All of above36. Error of duplication of Sales Invoice Rs. 5,000:

A) Will not affect Trial Balance

B) Will make Trial Balance credit excess by Rs. 5,000

C) Will make Trial Balance debit excess by Rs. 5,000

D) Will still tally but profit overstated*37. Capital Rs. 2,20,000 (Cr) less Net Loss Rs. 35,725 = *

A) Rs. 2,55,725

B) Rs. 1,84,275

C) Rs. 2,20,000

D) Rs. 1,84,275 Dr38. Insurance Expense Rs. 780 (Dr) - Prepaid Rs. 200. Balance Sheet amount:

A) Rs. 780 Asset

B) Rs. 580 Expense

C) Rs. 200 Asset

D) Both B & C39. Which is True?

A) Trial Balance ensures accuracy of ledger posting in all respects

B) Trial Balance is conclusive proof of no error

C) Trial Balance helps in preparation of Final Accounts

D) Trial Balance is prepared after Final Accounts40. If Wages Rs. 1,200 is for factory workers, it goes to:

A) Profit & Loss A/c

B) Trading A/c

C) Balance Sheet

D) Suspense41. Goods withdrawn by proprietor Rs. 2,000 not recorded. Effect on Trial Balance?

A) Will not tally

B) Will tally

C) Will show Rs. 2,000 difference

D) Profit overstated but tally42. The total of Sales Book Rs. 3,00,000 was posted to Purchases Book. Difference in Trial Balance?

A) Debit excess Rs. 6,00,000

B) Credit excess Rs. 6,00,000

C) Debit excess Rs. 3,00,000 and Credit excess Rs. 3,00,000

D) Will not tally by Rs. 6,00,00043. Carriage Outwards Rs. 700 is:

A) Direct Expense - Trading Dr

B) Indirect Expense - P&L Dr

C) Asset

D) Income44. If Provision for Bad Debts old balance is Rs. 1,550 (Cr) and new provision Rs. 2,400, net charge to P&L is:

A) Rs. 2,400

B) Rs. 850

C) Rs. 3,950

D) Rs. 1,55045. Buildings Rs. 2,80,000 less Depreciation 7% =

A) Rs. 2,60,400

B) Rs. 2,99,600

C) Rs. 2,60,400 Asset

D) Both A & C46. Which method of Trial Balance shows both Dr & Cr totals of each ledger account?

A) Balance Method

B) Total Method

C) Balance cum Total Method

D) None47. Suspense Account with debit balance is shown in:

A) Liability side of Balance Sheet

B) Asset side of Balance Sheet

C) P&L Dr

D) Trading Dr48. Rent Received in Advance Rs. 6,000 is:

A) Asset

B) Liability - Current Liability

C) Income for current year

D) Expense49. If Debtors include Rs. 2,000 due from a customer who is also a creditor for Rs. 1,000, provision for doubtful debts should be calculated on:

A) Rs. 2,000

B) Rs. 1,000

C) Rs. 3,000

D) Net Rs. 1,000 after set-off50. Final Accounts preparation from Trial Balance which has difference transferred to Suspense A/c, indicates:

A) Books are 100% accurate

B) Final Accounts will still tally but include Suspense

C) Final Accounts cannot be prepared

D) Suspense is profit

ANSWER KEYs 

1-C, 2-B, 3-A, 4-A, 5-D, 6-C, 7-C, 8-A, 9-B, 10-B, 11-B, 12-A, 13-A, 14-B, 15-B, 16-C, 17-A, 18-B, 19-D, 20-A, 21-C, 22-B, 23-B, 24-B, 25-B, 26-A, 27-B, 28-B, 29-A, 30-C, 31-B, 32-B, 33-B, 34-B, 35-D, 36-D, 37-B, 38-D, 39-C, 40-B, 41-B, 42-D, 43-B, 44-B, 45-D, 46-B, 47-B, 48-B, 49-D, 50-B