A trial balance is prepared to check: MCQ with Answer and Explanation

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A trial balance is prepared to check:

A. The financial position of the business

B. The profitability of the business

C. The cash flow of the business

D. The arithmetical accuracy of the ledger

Answer: Option D

Solution (By JKSSB Mock Tests)

The primary purpose of a trial balance is to verify the arithmetical accuracy of the ledger by ensuring total debits equal total credits.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Which of the following errors will cause the Trial Balance to disagree?

A. Casting the Sales Return book short by Rs 100

B. Complete omission of a transaction

C. Posting Rs 500 to the debit of Machinary instead of Wages

D. Recording a transaction in the wrong subsidiary book

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Correct Answer: Option A

Explanation:
Short casting (undercasting) a subsidiary book affects only one side of the ledger, resulting in a mismatch in the Trial Balance.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'Ind AS 24' on Related Party Disclosures requires disclosure of:

A. Only parent-subsidiary relationships

B. Only compensation of key management personnel

C. Only transactions with key management personnel

D. Relationships, transactions, and outstanding balances with related parties

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Correct Answer: Option D

Explanation:
Ind AS 24 requires disclosure of related party relationships, transactions, and balances.

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Question #3

The 'Insolvency and Bankruptcy Board of India' (IBBI) regulates:

A. Insolvency professionals, agencies, and processes under IBC

B. Banking

C. Capital markets

D. Companies Act compliance

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Correct Answer: Option A

Explanation:
IBBI is the regulator for insolvency and bankruptcy ecosystem.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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