What is the purpose of posting journal entries to the ledger?
A) To record the financial position of the company
B) To summarize financial transactions
C) To classify transactions into accounts
D) To calculate the trial balance
Which of the following is true about the trial balance?
A) It is prepared after the income statement
B) It helps to detect errors in the accounting records
C) It is prepared to finalize the profit and loss account
D) It is only prepared after posting to the cash book
Which of the following accounts will appear in the trial balance?
A) Only temporary accounts
B) Only permanent accounts
C) Both permanent and temporary accounts
D) Neither permanent nor temporary accounts
A trial balance is balanced when:
A) Total credits equal total debits
B) The debit column is greater than the credit column
C) There are no outstanding debts
D) Cash and bank accounts match
What happens if a transaction is not posted to the ledger?
A) The trial balance will still be correct
B) The error will be revealed in the trial balance
C) It will not affect the financial statements
D) The error will cause the trial balance to be unbalanced
The ledger accounts are primarily used to:
A) Record only cash transactions
B) Maintain the financial records of a company
C) Prepare the trial balance
D) Record the journal entries
Which of the following accounts will NOT appear in the trial balance?
A) Asset accounts
B) Expense accounts
C) Sales accounts
D) Dividend distribution accounts
The difference between the debit and credit side of a ledger is known as:
A) Account balance
B) Account reconciliation
C) Trial balance
D) Financial statement
In which of the following cases will a trial balance not balance?
A) If a transaction is entered twice
B) If an error in addition occurs
C) If only one side of a journal entry is posted
D) All of the above
A ledger account contains:
A) A detailed record of each transaction
B) Only journal entries
C) A summary of financial transactions
D) None of the above
What is the first step in the accounting process before preparing a trial balance?
A) Journalizing transactions
B) Posting entries to the ledger
C) Preparing the balance sheet
D) Closing the temporary accounts
Which of the following is NOT a purpose of a trial balance?
A) To detect arithmetic errors
B) To calculate the profit and loss
C) To check the equality of debits and credits
D) To confirm that journal entries have been posted correctly
When preparing the trial balance, which column is used to list the account balances?
A) Debit column
B) Credit column
C) Both the debit and credit columns
D) None of the above
What is the result if the trial balance does not balance?
A) Financial statements will be unaffected
B) The company will not be able to proceed with the audit
C) It indicates that there may be errors in the accounting process
D) The errors are due to mathematical mistakes only
Which of the following is true about ledger accounts?
A) They represent individual records for each type of transaction
B) They are used to summarize financial information
C) They provide detailed information for the trial balance
D) All of the above
In a double-entry system, each transaction must be:
A) Recorded in the journal only
B) Posted to both the debit and credit sides of the ledger
C) Only recorded if it affects assets
D) Ignored if it involves non-financial elements
What is the main advantage of using the trial balance?
A) It helps in preparing income statements
B) It ensures that the books are balanced
C) It prepares the financial statements automatically
D) It indicates the cash balance
What is posted to the ledger?
A) Only journal entries related to cash transactions
B) All journal entries for the accounting period
C) Only the summary of financial transactions
D) Entries that are part of the year-end closing process
A trial balance should be prepared at which of the following stages of accounting?
A) After journalizing all transactions
B) After posting all journal entries to the ledger
C) After preparing the income statement
D) After preparing the financial statements
In a trial balance, what should be done if a debit balance is listed in the credit column?
A) Ignore it
B) Correct the entry and post it to the correct column
C) Transfer it to the balance sheet
D) Nothing needs to be done, as it’s still valid
Which of the following accounts would be shown as a credit in the trial balance?
A) Accounts Receivable
B) Revenue Accounts
C) Expense Accounts
D) Cash
If an error is found after the trial balance has been prepared, what should be done first?
A) Ignore the error
B) Correct the error and recalculate the trial balance
C) Prepare a new trial balance
D) Post the error to the journal again
The trial balance is considered to be the final step in:
A) Preparing the financial statements
B) Recording journal entries
C) Posting transactions to the ledger
D) Closing the books for the period
Which of the following is true about the trial balance?
A) It lists all the accounts in the general ledger
B) It is used to finalize the income statement
C) It helps to summarize the general ledger balances
D) It is prepared only at year-end
What is the first step in correcting a trial balance that is not balancing?
A) Check for arithmetic errors
B) Look for entries recorded twice
C) Identify any missing accounts
D) Review the journal for errors
In the ledger, where are expenses usually posted?
A) Debit side
B) Credit side
C) Both sides
D) Neither side
What is the journal entry for transferring balances from temporary accounts to the trial balance?
A) Debit Income Summary, Credit Revenue Accounts
B) Debit Expense Accounts, Credit Income Summary
C) Debit Temporary Accounts, Credit Trial Balance
D) Debit Retained Earnings, Credit Income Summary
What is the correct format of the trial balance?
A) Two columns: one for debits and one for credits
B) Multiple columns for different types of accounts
C) Separate sheets for revenue and expense accounts
D) A list of only the ledger accounts
What is the purpose of posting to the ledger?
A) To track the financial performance of the company
B) To create journal entries
C) To calculate depreciation
D) To determine profit margins
In the trial balance, which account type is most likely to have a credit balance?
A) Asset accounts
B) Liability accounts
C) Expense accounts
D) Equity accounts
