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. Right-hand side
- B. Left-hand side
- C. Upper section
- D. Lower section
Explanation: Debit entries are recorded on the left-hand side of a ledger account, while credit entries are recorded on the right-hand side.
Correct answer: Left-hand side- A. Debit Cash, credit Capital
- B. Debit Bank, credit Drawings
- C. Debit Drawings, credit Bank
- D. Debit Capital, credit Cash
Explanation: Personal withdrawals reduce the owner’s equity and are recorded in Drawings, which is debited.
Correct answer: Debit Drawings, credit Bank- A. Cash Account
- B. Purchases Account
- C. Supplier’s Account
- D. Purchases Returns Account
Explanation: Goods returned to a supplier are recorded in Purchases Returns Account, which is credited to reduce the net purchases.
Correct answer: Purchases Returns 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.
Correct answer: A balance in an asset account- A. Carriage inward
- B. Discount received
- C. Trade expenses
- D. Returns inward
Explanation: Discount received is an income, so it normally has a credit balance. Carriage inward, trade expenses and returns inward are generally…
Correct answer: Discount received- A. Correct valuation of every asset
- B. Complete absence of all errors
- C. Arithmetical equality of postings
- D. Accurate calculation of net profit
Explanation: Equal trial balance totals mainly show that the recorded debits and credits are arithmetically equal.
Correct answer: Arithmetical equality of postings- A. A bank loan paid in advance
- B. Cash held in the office
- C. A deposit in transit
- D. A bank overdraft
Explanation: A credit balance in the bank account normally represents an overdraft, because the business owes money to the bank.
Correct answer: A bank overdraft- A. A compound entry
- B. A closing entry
- C. A transfer entry
- D. A reversing entry
Explanation: An entry involving two or more debit or credit accounts is called a compound entry.
Correct answer: A compound entry- A. Omitting a transaction completely
- B. Posting a transaction to one side only
- C. Recording equal wrong amounts on both sides
- D. Using the wrong account of the same class
Explanation: If only one side of a double entry is posted, the debit and credit totals differ, so the trial balance will usually disagree.
Correct answer: Posting a transaction to one side only- A. Sales Account
- B. Capital Account
- C. Drawings Account
- D. Cash Account
Explanation: Cash increases when the owner introduces money into the business, so Cash Account is debited.
Correct answer: Cash Account- A. Debit Purchases Rs. 30,000; credit Cash Rs. 18,000 and Supplier Rs. 12,000
- B. Debit Purchases Rs. 18,000; credit Cash Rs. 18,000 and Supplier Rs. 12,000
- C. Debit Cash Rs. 18,000 and Purchases Rs. 12,000; credit Supplier Rs. 30,000
- D. Debit Supplier Rs. 12,000; credit Purchases Rs. 30,000 and Cash Rs. 18,000
Explanation: The full cost of goods purchased is debited to Purchases. Cash is credited for the amount paid immediately, while the supplier is credited…
Correct answer: Debit Purchases Rs. 30,000; credit Cash Rs. 18,000 and Supplier Rs. 12,000- A. Rs. 25,000 on the credit side
- B. Rs. 25,000 on the debit side
- C. Rs. 71,000 on the debit side
- D. Rs. 96,000 on the credit side
Explanation: The account has a debit balance of Rs. 25,000, calculated as Rs. 96,000 minus Rs. 71,000.
Correct answer: Rs. 25,000 on the debit side- A. Balance method
- B. Adjusted balance method
- C. Total method
- D. Closing entry method
Explanation: Under the total method, both sides of each ledger account are listed in the trial balance.
Correct answer: Total method- A. Debit side as balance b/d
- B. Credit side as balance c/d
- C. Debit side as balance c/d
- D. Credit side as balance b/d
Explanation: A credit balance brought forward is entered on the credit side as balance brought down.
Correct answer: Credit side as balance b/d