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 cash flow of the business

B. The arithmetical accuracy of the ledger

C. The profitability of the business

D. The financial position of the business

Answer: Option B

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

If the purchase of a printer for ₹12,000 is recorded in the purchases book, the error is:

A. Error of omission

B. Error of principle

C. Error of commission

D. Compensating error

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Correct Answer: Option B

Explanation:
Printer is an asset, should be capitalised. Recording in purchases book treats it as expense, violating accounting principles.

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Question #2

The 'Throughput Accounting' emphasises:

A. Maximising throughput (sales minus material cost) while minimising operating expenses and inventory

B. Increasing fixed cost

C. Maximising production volume

D. Reducing labour cost

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Correct Answer: Option A

Explanation:
Throughput accounting is based on the Theory of Constraints.

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Question #3

S1: The Reserve Bank of India (RBI) is the central bank of India. S2: RBI regulates the entire financial system of India. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. S2 only

C. S1 only

D. Both S1 and S2

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Correct Answer: Option D

Explanation:
RBI is the central bank, established under the RBI Act, 1934. It regulates the monetary policy, banking system, and foreign exchange, effectively regulating the core of the Indian financial system. Both statements are correct.

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

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