A 'Trial Balance' is a: MCQ with Answer and Explanation

A 'Trial Balance' is a:

A. Statement

B. Ledger account

C. Subsidiary book

D. Part of journal

Answer: Option A

Trial Balance is a statement listing all ledger balances to verify arithmetical accuracy.

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

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Question #1 Report Error

Which of the following is not an external user of accounting information?

A. Suppliers

B. Management

C. Government

D. Investors

Correct Answer: Option B

Explanation:
Management is an internal user. External users include investors, government, suppliers, creditors, etc.

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

Question #2 Report Error

Which of the following is a solvency ratio?

A. Gross Profit Ratio

B. Stock Turnover Ratio

C. Current Ratio

D. Debt-Equity Ratio

Correct Answer: Option D

Explanation:
The Debt-Equity Ratio measures the long-term solvency of a firm by comparing its long-term debts to its shareholders' equity.

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

Question #3 Report Error

A 'High Debtors Turnover Ratio' indicates:

A. Large bad debts

B. Slow collection from debtors

C. Excess inventory

D. Efficient collection from debtors

Correct Answer: Option D

Explanation:
Higher ratio means faster collection of receivables.

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