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

Question Report Error
A trial balance is prepared to check:
A. The financial position of the business
B. The profitability of the business
C. The arithmetical accuracy of the ledger
D. The cash flow of the business
Answer: Option C
Solution (By JKExamLibrary)
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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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error
In financial management, 'Float' refers to:
A. Issuing new shares
B. The time difference between writing a cheque and its actual clearance from the bank
C. Sinking fund investments
D. The amount of petty cash
Discuss

Correct Answer: Option B

Explanation:
Float is the delay in the clearing system, creating a temporary discrepancy between the firm's cash balance and the bank's ledger balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2 Report Error
Recent developments in accounting include the increased use of:
A. Manual voucher posting
B. Single entry only
C. Paper-based ledgers
D. Cloud accounting and AI
Discuss

Correct Answer: Option D

Explanation:
Technological advancements like cloud accounting, artificial intelligence, and blockchain are recent trends.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3 Report Error
The primary purpose of preparing a Profit and Loss Account is to find out:
A. Net Profit or Net Loss
B. Financial Position
C. Gross Profit
D. Total Assets
Discuss

Correct Answer: Option A

Explanation:
The P&L account deduces all indirect expenses from the gross profit to ascertain the final Net Profit or Loss for the period.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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