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

The 'Trial Balance' is prepared to:

A. Check accuracy of posting

B. Prepare cash flow

C. Ascertain profit

D. Determine financial position

Answer: Option A

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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Question #1 Report Error

The Central Board of Direct Taxes (CBDT) functions under which department of the Ministry of Finance?

A. Department of Revenue

B. Department of Financial Services

C. Department of Economic Affairs

D. Department of Expenditure

Correct Answer: Option A

Explanation:
CBDT handles direct tax administration and forms part of the Department of Revenue.

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

Question #2 Report Error

In the Trial Balance, a bank overdraft is shown in the:

A. Suspense column

B. Adjustment column

C. Credit column

D. Debit column

Correct Answer: Option C

Explanation:
Bank overdraft is a liability, and all liabilities have a credit balance, thus appearing in the credit column of the trial balance.

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

Question #3 Report Error

A 'Rectifying Entry' is passed to:

A. Close the books

B. Correct errors in accounts

C. Record opening entries

D. Adjust depreciation

Correct Answer: Option B

Explanation:
Rectifying entries correct errors found after posting.

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