Day: January 18, 2019

Accounting Multiple Choice Question – 18 January 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The purpose of a firm preparing a trial balance is to establish whether ……. ?

Select ONE answer:

  1. the total of the debit balances brought down in its nominal or general ledger equals that of the credit balances brought down
  2. the double-entry record it has made for all transactions is correct
  3. its bank balance is correct
  4. it has earned a profit or incurred a loss

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 1 – 2 a balanced trial balance does not prove that the double-entry record for all transactions is correct; 3 the trial balance does not prove that the balance on any individual ledger account is correct; 4 a profit and loss account determines whether the business has made a profit or a loss.

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