Test your knowledge of trial balances by answering the 8 short questions given below. We suggest that you try to answer each question yourself before clicking on the "See answer" button. If you find it difficult to answer any of these questions, consider reading the trial balance article available in this website's explanation section.
1.
What is a trial balance and why is it prepared?
2.
When do businesses prepare a trial balance?
3.
If an account has a debit balance, where should it be placed in the trial balance?
4.
If an account has a credit balance, where should it be placed in the trial balance?
5.
What does an agreed trial balance tell us?
6.
What does a disagreed trial balance tell us?
7.
Which accounts do not need to be transferred to the trial balance?
8.
Which two methods are used to prepare the trial balance?
Trial Balance Q&A FAQs
A Trial Balance is a list of all the accounts in a company's General Ledger, with their balances as of a specific date. It is used to verify the accuracy of the Bookkeeping entries and to prepare Financial Statements.
A Trial Balance is important because it helps ensure the accuracy of the Financial Statements. If the balances in the Trial Balance do not match, it indicates that there may be errors in the Bookkeeping entries.
To prepare a Trial Balance, you need to know the account balances as of a specific date. You can obtain this information from the company's General Ledger or other financial reports. Once you have this information, you can create a list of all the accounts and their balances.
Some common errors that can occur in Trial Balances include incorrect account balances, incorrect debit or credit amounts, and incorrect dates.
If the Trial Balance doesn't balance, it indicates that there may be errors in the Bookkeeping entries. You should investigate the discrepancies and correct any errors. Once the corrections are made, you should recalculate the Trial Balance to ensure that it balances.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
