Which of the following is true regarding a Trial Balance? MCQ with Answer and Explanation

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Which of the following is true regarding a Trial Balance?

A. It proves the arithmetical accuracy of books.

B. It is prepared at the end of every month.

C. It detects errors of principle.

D. It is a part of the double entry system.

Answer: Option A

Solution (By JKSSB Mock Tests)

Trial balance only checks arithmetical accuracy; it does not detect all errors, especially errors of principle.

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

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Question #1

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Expenditure incurred on overhauling a second-hand machinery purchased recently to put it in working condition is:

A. Deferred Revenue Expenditure

B. Capital Expenditure

C. Revenue Expenditure

D. Loss

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Correct Answer: Option B

Explanation:
All costs incurred before a fixed asset is ready for its intended use are capitalized.

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Question #2

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The 'Faceless Penalty' scheme under income tax was introduced in:

A. 2020

B. 2021

C. 2017

D. 2019

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Correct Answer: Option B

Explanation:
Faceless penalty scheme was launched in 2021 to impart transparency.

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Question #3

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The 'Trial Balance' is prepared to:

A. Check accuracy of posting

B. Ascertain profit

C. Prepare cash flow

D. Determine financial position

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Correct Answer: Option A

Explanation:
Primary purpose is to verify arithmetical accuracy of ledger postings.

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

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