A Trial Balance is prepared primarily to check the: MCQ with Answer and Explanation

A Trial Balance is prepared primarily to check the:
A. Liquidity of the firm
B. Arithmetical accuracy of ledger accounts
C. Profitability of the business
D. Financial position of the business
Answer: Option B
Solution (By JKSSB Mock Tests)
Trial Balance lists all debit and credit balances to ensure total debits equal total credits, verifying mathematical accuracy.

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Practice More Accountancy and Book Keeping Questions

Question #1
An auditor's primary responsibility is to:
A. Compute tax liability
B. Express an opinion on the financial statements
C. Detect all frauds
D. Prepare financial statements

Correct Answer: Option B


Explanation:
Auditor examines the financial statements and provides an opinion whether they give a true and fair view.

Question #2
The 'Statement of Affairs' under single entry is similar to:
A. Trading Account
B. Balance Sheet
C. Profit and Loss Account
D. Cash Flow Statement

Correct Answer: Option B


Explanation:
Statement of affairs shows assets and liabilities, akin to a balance sheet.

Question #3
S1: Social accounting reports the social and environmental impact of a business. S2: Social audit is a formal assessment of a company's social accounting systems. Which statement(s) is/are correct?
A. Both S1 and S2
B. S2 only
C. S1 only
D. Neither S1 nor S2

Correct Answer: Option A


Explanation:
Social accounting communicates the social and environmental effects of a company's actions. Social audit is the systematic evaluation of these social accounting reports to ensure accountability. Both are correct.