Question

1. What is the purpose of preparing a trial balance?


A. To check the accuracy of the ledger


B. To determine the net income of a business


C. To show the financial position of a business


D. To determine if a business is profitable


2. Which of the following errors in the journal entry will not be detected by trial balance?

A. Credits are understand and debits are recorded correctly


B. Debits are overstated and the credits are correctly recorded


C. Debits are understated and the credits are overstated by different amounts


D. Both debit and credit parts are overstated by the same amount


3. A trial balance also provides a:

A. Summary of the next profits made during the period


B. Summary of all transactions made since the end of the previous period


C. Summary of the debits and credits made in the previous period


D. Summary of the sales made during the current period

Answer 1

answer is a

Explanation:

trial balance can be defined as a list of the balances of ledger entries that test its arithmetical accuracy.

Answer 2

Answer:

1. Answer-(A,C): To check the accuracy of the ledger, and to show the financial position of a business.
2. Answer-(B,C,D): Debits are overstated and the credits are correctly recorded,Debits are understated and the credits are overstated by different amounts, and Both debit and credit parts are overstated by the same amount.
3. Answer-(C): Summary of the debits and credits made in the previous period.

Explanation:

Trial Balance:

The process is implemented inside the institution or firms in to show or check the accuracy of the ledger and also to show the financial position of any business. As the summary is created or made on the basis of the debits and the credits made in the previous month or period.