Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
When the total of debit balances equals the total of credit balances, what specific aspect of the accounting records is verified by the trial balance?
Answer:
Arithmetic accuracy
A trial balance serves primarily to check the arithmetic accuracy of the ledger postings. If the totals match, it indicates that the debits and credits were posted correctly in terms of value. However, it does not guarantee the absence of errors, such as errors of principle or complete omissions of transactions.
2
What is the primary objective of preparing a trial balance?
Answer:
Ledger accounts balances
The primary objective of a trial balance is to verify the arithmetic accuracy of the ledger accounts. By listing all debit and credit balances, the accountant can ensure that the double-entry system has been applied correctly. If the totals match, it provides confidence that the ledger postings are mathematically sound, though it does not detect all types of accounting errors.
3
When the total of debit balances equals the total of credit balances in a trial balance, what does this equality primarily confirm?
Answer:
Accuracy of calculations
The equality of the trial balance columns primarily confirms the arithmetic accuracy of the ledger postings and the balancing process. However, it does not guarantee that the entries are free from errors, such as errors of principle or complete omissions, which do not affect the mathematical balance of the trial balance.