Free Ledger Accounts and the Trial Balance MCQs with Answers
34 Ledger Accounts and the Trial Balance MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
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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- A. To classify transactions into individual accounts
- B. To record transactions only in date order
- C. To calculate cash collections for the period
- D. To prepare invoices for credit customers
Explanation: A ledger classifies recorded transactions into separate accounts, such as cash, sales, purchases, and capital.
Correct answer: To classify transactions into individual accounts- A. The debtor's personal account
- B. The cash account
- C. The sales account
- D. The capital account
Explanation: Cash is an asset, so an increase in cash is recorded on the debit side of the Cash Account.
Correct answer: The cash account- A. Debit Cash Account and credit Furniture Account
- B. Debit Purchases Account and credit Cash Account
- C. Debit Furniture Account and credit Cash Account
- D. Debit Expense Account and credit Furniture Account
Explanation: Furniture is an asset that increases, so the Furniture Account is debited.
Correct answer: Debit Furniture Account and credit Cash Account- A. To prove that every transaction is completely correct
- B. To replace the preparation of final accounts
- C. To calculate the exact profit before adjustments
- D. To check the arithmetical equality of ledger balances
Explanation: A trial balance checks whether the total debit balances equal the total credit balances.
Correct answer: To check the arithmetical equality of ledger balances- A. A debit entry posted without any credit entry
- B. A transaction completely omitted from the books
- C. A debit total added more than the credit total
- D. A ledger balance transferred to the wrong side
Explanation: If a transaction is completely omitted, neither its debit nor its credit is recorded, so the trial balance can still agree.
Correct answer: A transaction completely omitted from the books- A. The Statement of Financial Position
- B. The Cash Book only
- C. The Trading or Profit and Loss Account
- D. The Capital Account directly
Explanation: Expense accounts are nominal accounts, and their balances are transferred to the relevant income statement account.
Correct answer: The Trading or Profit and Loss Account- A. The account represents an income earned by the business
- B. The business owes money to the person or entity
- C. The person has introduced permanent capital
- D. The person or entity owes money to the business
Explanation: A debit balance in a personal account usually means the account holder is a debtor and owes money to the business.
Correct answer: The person or entity owes money to the business- A. Sales revenue
- B. Accounts payable
- C. Owner's capital
- D. Rent expense
Explanation: Rent is an expense and normally has a debit balance, so it appears on the debit side of the trial balance.
Correct answer: Rent expense- A. Customer's Account
- B. Purchases Account
- C. Cash Account
- D. Sales Account
Explanation: A return from a customer reduces the amount receivable from that customer, so the customer's account is credited.
Correct answer: Customer's Account- A. To close the account permanently
- B. To bring the balancing amount to the next period
- C. To record a new transaction in the account
- D. To transfer every balance to the trial balance
Explanation: Balance c/d means balance carried down. It is entered to make both sides of the account equal and is then brought down as balance b/d in…
Correct answer: To bring the balancing amount to the next period- A. Ledger, journal, trial balance
- B. Trial balance, journal, ledger
- C. Journal, ledger, trial balance
- D. Journal, trial balance, ledger
Explanation: Transactions are first recorded in the journal and then posted to their respective ledger accounts.
Correct answer: Journal, ledger, trial balance- A. Debit Hamid, credit Purchases
- B. Debit Hamid, credit Sales
- C. Debit Cash, credit Hamid
- D. Debit Purchases, credit Hamid
Explanation: Purchases of goods increase the purchases account, so it is debited. Hamid becomes a creditor, so his personal account is credited.
Correct answer: Debit Purchases, credit Hamid- A. On the credit side
- B. On the debit side
- C. In the journal only
- D. In the trial balance only
Explanation: The balance c/d is placed on the side with the smaller total to make both sides equal.
Correct answer: On the credit side- A. Real account
- B. Personal account
- C. Nominal account
- D. Valuation account
Explanation: The owner’s capital account is a personal account because it represents the owner’s claim against the business.
Correct answer: Personal account- A. The value of closing stock
- B. The date of the next transaction
- C. The page reference of the ledger posting
- D. The total of the trial balance
Explanation: The ledger folio column provides a cross-reference to the page or account location where the journal entry is posted.
Correct answer: The page reference of the ledger posting- A. Salary Account
- B. Drawings Account
- C. Capital Account
- D. Cash Account
Explanation: Salary is an expense and is debited when incurred or paid. Cash decreases because of the payment, so Cash Account is credited.
Correct answer: Cash Account- A. A debit balance of an asset
- B. A transaction recorded in the journal but not posted
- C. A debit balance of an expense
- D. A credit balance of a liability
Explanation: A trial balance contains balances extracted from ledger accounts, not unposted journal transactions.
Correct answer: A transaction recorded in the journal but not posted- A. Drawings Account
- B. Trading Account
- C. Suspense Account
- D. Capital Account
Explanation: A suspense account may temporarily hold the difference when the trial balance fails to agree.
Correct answer: Suspense Account19. Under the traditional rules of accounting, which entry is made for an increase in an asset account?
- A. Credit the expense account
- B. Credit the asset account
- C. Debit the capital account
- D. Debit the asset account
Explanation: Assets are real accounts, and the traditional rule is to debit what comes into the business.
Correct answer: Debit the asset account- A. An amount owed by the business to the supplier
- B. An amount owed by the supplier to the business
- C. An expense paid in advance by the business
- D. A loss transferred to the supplier
Explanation: A supplier normally has a credit balance because the supplier is a creditor of the business.
Correct answer: An amount owed by the business to the supplierLedger Accounts and the Trial Balance MCQs: common questions
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