Association of Chartered Certified Accountants · Financial Accounting
ACCA FA Preparing a trial balance: practice questions with answers
3 free exam-style questions on Preparing a trial balance for ACCA FA Financial Accounting. Try each one, then open the answer to read the explanation. Fincora has 17 original questions on this syllabus area.
Question 1
Which of the following errors would cause the totals of Selby Co's trial balance to disagree?
- A A sales invoice for $1,200 was not recorded in the books at all
- B A payment of $900 for rent was debited to the rates expense account instead of the rent account
- C The purchase of a delivery van for $28,000 was debited to the motor expenses account
- D A cash sale of $450 was correctly debited to the bank account but credited to the sales account as $540
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Answer: D. A trial balance only reveals errors where debits and credits are unequal. Errors of omission, commission, principle, original entry, complete reversal and compensating errors do not affect the totals. Posting $450 on the debit side and $540 on the credit side creates a $90 difference, which would be placed in a suspense account until corrected.
Question 2
Which of the following statements about the trial balance is correct?
- A If the debit and credit totals of the trial balance agree, the ledger accounts contain no errors
- B It is a ledger account in the general ledger and forms part of the double-entry system
- C It is a list of the balances on all the ledger accounts at a point in time, and is used as the starting point for preparing the financial statements
- D It is one of the financial statements that a company must publish for its shareholders each year
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Answer: C. The trial balance is a list of the closing balances on every ledger account, with debit balances in one column and credit balances in the other. Its purposes are:
- to check that the double entry has been completed arithmetically (the totals should agree), and
- to provide the starting point for preparing the statement of profit or loss and statement of financial position.
Its main limitation is that agreement of the totals does not prove the ledger is correct: errors of omission, commission, principle, original entry, reversal of entries and compensating errors all leave the trial balance in agreement.
Question 3
Which of the following lists contains only balances that would normally appear in the credit column of a trial balance?
- A Allowance for receivables, sales returns, accrued expenses, share premium account
- B Bank overdraft, carriage outwards, 8% loan notes, revaluation surplus
- C Accumulated depreciation, discounts received, deferred income, purchase returns
- D Trade payables, drawings, accrued expenses, owner's capital account
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Answer: C. A trial balance lists every ledger balance in the debit or the credit column:
- Debit balances: assets, expenses, drawings, and items that reduce income or liabilities (such as sales returns and discounts allowed).
- Credit balances: liabilities, capital and reserves, income, and items that reduce an asset or an expense (such as accumulated depreciation, the allowance for receivables and purchase returns).
| Item | Balance |
|---|---|
| Accumulated depreciation, allowance for receivables | Credit (reduce assets) |
| Discounts received, purchase returns | Credit (income / reduce cost of purchases) |
| Deferred income, accrued expenses, bank overdraft, loan notes, payables | Credit (liabilities) |
| Share premium, revaluation surplus, capital | Credit (equity) |
| Sales returns, carriage outwards, drawings | Debit |
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