Test Your Knowledge - The Trial Balance

What is the primary purpose of a trial balance?

To verify the accuracy of the ledger accounts
To calculate the profits
To prepare the financial statements

Which of the following errors would not be revealed by a trial balance?

An error in casting the ledger
A transposition error
A double posting error

What happens if the trial balance does not balance?

It indicates that the financial statements are incorrect
It shows that there is an error in the accounting system
It means that there are unrecorded transactions

Which accounts are included in a trial balance?

Only income and expense accounts
Both nominal and real accounts
Only personal accounts

If a trial balance does not balance, which of the following should be done first?

Check for any omitted entries
Review all journal entries
Verify the arithmetic of all ledger balances

Which is NOT a reason for a trial balance to be unequal?

Omission of a transaction
Posting an entry to the wrong account
All entries being correctly posted

Which of these is most likely to cause an imbalance in the trial balance?

Transposition errors
Correctly recording each transaction
Both debit and credit entries of equal value

What is the ideal outcome when a trial balance is completed?

The debit and credit columns must be equal
The total assets must equal the total liabilities
The account balances must be in alphabetical order

What is the first step in preparing a trial balance?

Add up all the debits and credits in the ledgers
Balance the general ledger accounts
Identify the correct journal entries

Which of the following is TRUE about the trial balance?

It helps detect errors in the financial statements
It is prepared at the end of the accounting period
It is only used for internal financial reporting

Test Your Knowledge - You have 10 questions!