Ledger And Trial Balance

Reviewed by Editorial Team
The ProProfs editorial team is comprised of experienced subject matter experts. They've collectively created over 10,000 quizzes and lessons, serving over 100 million users. Our team includes in-house content moderators and subject matter experts, as well as a global network of rigorously trained contributors. All adhere to our comprehensive editorial guidelines, ensuring the delivery of high-quality content.
Learn about Our Editorial Process
| By Olilly
O
Olilly
Community Contributor
Quizzes Created: 1 | Total Attempts: 1,795
| Attempts: 1,795
Quiz Flashcard
SettingsSettings
Please wait...
  • 1/5 Questions

    When capital increases, it is credited in the T account.

    • True
    • False
Please wait...
About This Quiz

This quiz on 'Ledger and Trial Balance' assesses knowledge on trial balance, T accounts, and ledger adjustments. It evaluates understanding of financial statements preparation and ensures readiness for more advanced accounting tasks.

Financial Accounting Quizzes & Trivia

Quiz Preview

  • 2. 

    When capital increases, it is credited in the T account.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    When capital increases, it is credited in the T account because the T account is used to track the changes in a specific account. In accounting, a credit entry is used to record an increase in a liability, equity, or revenue account. Since capital is an equity account, an increase in capital would be recorded as a credit entry in the T account. This helps to accurately reflect the changes in the financial position of the business.

    Rate this question:

  • 3. 

    The T accounts must be balanced off before doing the trial balance.

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Balancing off the T accounts before preparing the trial balance is necessary because it ensures that all the debits and credits in the accounts are properly recorded and equal. This step helps in identifying any errors or discrepancies in the accounting records before the trial balance is prepared, which is essential for accurate financial reporting. Therefore, it is true that the T accounts must be balanced off before doing the trial balance.

    Rate this question:

  • 4. 

    Is it true that the trial balance totals should agree?

    • No, there are sometimes good reasons why they differ

    • Yes, except where the trial balance is extracted at the year end

    • Yes, always

    • No, because it is not a balance sheet

    Correct Answer
    A. Yes, always
    Explanation
    The trial balance is a statement that lists all the balances of the general ledger accounts. It is used to ensure that the total debits equal the total credits, which indicates that the accounting entries are in balance. This is important because any imbalance could indicate errors in the recording of transactions. Therefore, the trial balance totals should always agree to ensure the accuracy of the financial statements.

    Rate this question:

  • 5. 

    Which of the following best describes trial balance?

    • Shows the financial position of a business

    • It is a special account

    • Shows all the entries in the books

    • None of the above

    Correct Answer
    A. Shows all the entries in the books
    Explanation
    The trial balance is a statement that shows all the entries in the books of accounts. It lists all the debit and credit balances of all the accounts in the ledger. It is used to ensure that the total debits equal the total credits, which helps in detecting any errors in the bookkeeping process. The trial balance is not a financial position statement or a special account, but rather a tool used in the accounting process.

    Rate this question:

Quiz Review Timeline (Updated): Jun 10, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jun 10, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 18, 2009
    Quiz Created by
    Olilly
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.