The 'Trial Balance' is prepared to: MCQ with Answer and Explanation

The 'Trial Balance' is prepared to:
A. Ascertain profit
B. Prepare cash flow
C. Check accuracy of posting
D. Determine financial position
Answer: Option C
Solution (By JKSSB Mock Tests)
Primary purpose is to verify arithmetical accuracy of ledger postings.

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Practice More Accountancy and Book Keeping Questions

Question #1
Economic Order Quantity (EOQ) is calculated to minimize:
A. Total of ordering cost and inventory carrying cost
B. Selling costs
C. Factory rent
D. Material price variance

Correct Answer: Option A


Explanation:
EOQ determines the optimal order size that perfectly balances and minimizes the costs of placing orders and holding inventory.

Question #2
A: The Consolidated Fund of India includes all revenues received by the Government. R: The government can withdraw money from the Consolidated Fund without parliamentary approval. Choose the correct option.
A. A is true but R is false
B. A is false but R is true
C. Both A and R are true but R is NOT the correct explanation of A
D. Both A and R are true and R is the correct explanation of A

Correct Answer: Option A


Explanation:
The Consolidated Fund of India includes all revenues, loans, and repayments. However, no money can be withdrawn from it without the authorization of Parliament through an Appropriation Bill. A is true, R is false.

Question #3
Under-casting of a Sales book by Rs 1,000 will result in:
A. No effect on the Trial Balance totals
B. Suspense account with a debit balance
C. Credit column of Trial Balance being short by Rs 1,000
D. Debit column of Trial Balance being short by Rs 1,000

Correct Answer: Option C


Explanation:
Sales have a credit balance. If it's under-casted, the total credit postings will be Rs 1,000 less, making the credit column short.