Question

9. Which of the following best describes a trial balance?

1. It is a special account

2. It shows all the entries in the books

3. It is a list of balances on the books

4. It shows the financial position of a business

10.       Which of the following best describes the meaning of ‘Purchases’?

1. Items bought

2. Goods paid for

3. Goods bought for resale

4. Goods bought on credit

                                   

11.       Which of the following is a liability?

1. Machinery

2. Cash at bank

3. Motor vehicles

4. Accounts payable for goods        

12.        $50 cash taken from cash till and banked is entered:

1. Debit cash column $50: Credit bank column $50

2. Debit bank column $50: Credit cash column $50

3. Debit cash column $50: Credit cash column $50

4. Debit bank column $50: Credit bank column $50          

13.       The Basic accounting equation is:

1. Assets = Cash + Capital

2. Asset = Expense + Income

3. Assets = Capital + Liabilities

4. Assets = Expenses + Capital

14.       Every business transaction affects at least ________ accounts:

1. One

2. Two

3. Three

4. Infinite

15.       The most common imprest system is the ________ system:

1. Discount

2. Petty cash

3. Cash book

4. Cash receipt

16.      Is it true that the trial balance totals should agree?

1. Yes, always

2. No, there are sometimes good reasons why they differ

3.   No, because it is not a statement of financial position

4. Yes, except where the trial balance is extracted at the year end

                                                                                                                 

Answer 1

· The correct answer is

It is a list of balances on the books

The trial balance shows the list of all debit or credit balance of the books.

The other options are not correct. It does not show entries. Balance sheet shows financial position.

10) The correct answer is

Goods bought for resale

Purchase is basically related to goods for resale

Goods bought on credit can be for consumption also, Items can also be for internal use, hence other options are not correct.

11) Accounts payable for goods is a liability

Other are assets not liability.

12) Here the correct answer is

Debit bank column 50 and credit cash column 50

13) The basic accounting equation is

Asset = Capital (equity) + Liability

asset shoudl be equal to equity plus external liability.