Which balance is normally carried forward from one accounting period to the next?
Correct answer: A. A balance in an asset account
- A. A balance in an asset account
- B. A balance in a sales account
- C. A balance in an expense account
- D. A balance in a purchases account
Explanation
Asset accounts usually have continuing balances that are carried into the next period. Sales, purchases and expenses are nominal accounts, so their balances are normally transferred to determine profit or loss.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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34 free Ledger Accounts and the Trial Balance MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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