Topic: Trial Balance: Usefulness and Limitations

Search 500 + past questions and counting.

FA – May 2012 – L1 – SA – Q3 – Trial Balance

Identifying how a trial balance helps disclose errors.

Question

In which of the following circumstances will the preparation of a Trial Balance assist in disclosing an error?

A. Failure to post an entry journal
B. Posting rent expenses to motor running account
C. Failure to post part of a journal entry
D. Posting the debit of a journal entry as a credit and vice versa
E. Failure to record an entry in the journal

Answer

Find Related Questions by Tags, levels, etc.

Tags: Error Detection, Journal Entries, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: MAY 2012

FA – Nov 2011 – L1 – SA – Q8 – Trial Balance

This question asks about what a collection of ledger balances is used for.

Question

A collection of ledger balances is used in preparing?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Ledger Balances, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q16 – Trial Balance

This question identifies which type of error affects the trial balance.

Question

Which of the following errors would affect a Trial Balance?
A. Error of commission
B. Error of original entry
C. Casting error
D. Error of omission
E. Error of principle

Answer

Find Related Questions by Tags, levels, etc.

Tags: Errors, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2011

FA – Nov 2020 – L1 – SB – Q3a – Trial Balance: Usefulness and Limitations

Explain trial balance errors and suspense account.

Question

i. Explain what a trial balance is and state FOUR errors that a trial balance does not reveal. (3 Marks)
ii. What is a suspense account? (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Errors, Journal Entries, Suspense account, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q19 – Trial Balance: Usefulness and Limitations

Identifies an error that would be discovered when extracting a trial balance.

Question

Which of the following errors would be discovered by extracting a trial balance?
A. A transaction has been completely missed in the accounts
B. The double entries have been made the wrong way around
C. Different figures have been entered for the debit and credit entries
D. An expense item has been posted to a non-current asset account
E. A credit sale made to Joke Ventures was debited to Joke Enterprises account

Answer

Find Related Questions by Tags, levels, etc.

Tags: Error Detection, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q1 -Trial Balance: Usefulness and Limitations

Identifies an item not found on the debit column of a trial balance.

Question

Which of the following items is NOT found on the debit column of a trial balance?
A. Capital
B. Motor vehicle
C. Rent and rates
D. Salaries and wages
E. Postage and stationery

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting principles, Financial Statements, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2020

FA – Nov 2013 – L1 – SA – Q13 – Trial Balance: Usefulness and Limitations

Identifying the type of error that does not affect a trial balance.

Question

Which of the following errors will NOT affect the agreement of a Trial Balance?

A. Error in computation of balances
B. Transposition of figures
C. Errors of wrong posting in the debit and credit columns
D. Errors of principle
E. Double entry errors

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Errors, Double Entry, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2013

FA – Nov 2015 – L1 – SA – Q18 – Trial Balance: Usefulness and Limitations

This question identifies which item is NOT expected on the debit column of a trial balance.

Question

Which of the following items is NOT found on the debit column of a trial balance?
A. Capital
B. Motor vehicle
C. Rent
D. Salaries and wages
E. Postage and stationery

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting principles, Debit Column, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2015

FA – May 2018 – L1 – SA – Q17 – Trial Balance: Usefulness and Limitations

Identifies the type of error that does not affect the balancing of a trial balance.

Question

Which of the following errors does NOT affect the balancing of a trial balance?
A. Error of principle
B. Casting error
C. Transposition error
D. Duplication entries
E. Missing entries in the ledger

Answer

Find Related Questions by Tags, levels, etc.

Tags: Error Types, Financial Statements, Trial Balance

Topic: Trial Balance: Usefulness and Limitations

FA – Nov 2021 – L1 – SB – Q3 – Trial Balance

This question involves preparing financial statements based on a given trial balance and additional adjustments.

Question

The following balances remained in the books of Chukwu Limited as at December 31, 2020:

Accounts	₦’000
200,000,000 ordinary shares of N1 each	200,000
Cash at bank and in hand	500
Inventory (December 31, 2020)	61,200
Receivables	18,005
Payables	15,009
Gross profit	128,942
General reserves	25,000
Salaries and wages	28,430
Prepayments	600
Bad debts written off	500
Accrued expenses	526
Director’s account (Credit)	2,500
Interest on loan notes (half year)	600
Sundry expenses	4,100
Rates and insurance	1,520
6% loan notes	20,000
Lighting and cooling	1,310
Postage and telephones	800
Motor vehicles (Cost ₦25,000,000)	25,000
Office fittings and equipment (Cost ₦65,500,000)	42,350
Provision for depreciation – Motor vehicles	10,000
Provision for depreciation – Office fittings & equipment	23,150
Profit or loss (January 1, 2020) (Credit)	22,300
Land and buildings (Cost)	239,362

Additional Information:

Office fittings and equipment are to be depreciated at 15% on cost, and motor vehicles at 20% of cost.
Provisions are to be made for:
- Directors’ fees of N6,000,000
- Audit fees of N2,500,000
The amount for insurance includes a premium of ₦600,000 paid in September 2020 to cover fire loss for the period September 1, 2020, to August 31, 2021.
A bill for N548,000 in respect of electricity consumed up to December 31, 2020, has not been accounted for.
The directors have recommended:
- N15,000,000 be transferred to general reserves
- A 5% dividend on ordinary share capital

You are required to prepare:
a. The trial balance of Chukwu Limited at December 31, 2020. (6 Marks)
b. The statement of profit or loss for the year ended December 31, 2020. (8 Marks)
c. The statement of financial position as at December 31, 2020. (6 Marks)
Note: Ignore taxation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Financial Position, Profit or Loss, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2021

FA – Nov 2021 – L1 – SA – Q11 – Trial Balance

This question evaluates the treatment of discounts in the cash book and their impact on the trial balance.

Question

If the total discount allowed in a cash book was N52,000 and the total discount received was N66,700, which of the following is TRUE concerning the two discounts?
A. They should not appear in the trial balance as they were already either received or paid out
B. They must be balanced in the cash book and the difference taken to the receivables
C. They must not appear in the general ledger
D. They must be balanced in the cash book and the difference taken to the trial balance
E. They should not be balanced in the cash book before being taken to the trial balance

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Book, Discounts, Multiple Choice, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2021

FA – Nov 2022 – L1 – SA – Q11 – Trial Balance

Determine the correct treatment of discounts allowed and received in the trial balance.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Discounts, Financial Records, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2022

FA – Nov 2014 – L1 – SA – Q19 – Trial Balance: Usefulness and Limitations

Identifying the record used to determine the arithmetical accuracy of ledger postings.

Question

Which of the following accounting records is used to determine the arithmetical accuracy of ledger posting?

A. Sales day book
B. Control accounts
C. Trial balance
D. Statement of Profit or Loss
E. Statement of Financial Position

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2014

FA – Nov 2019 – L1 – SB – Q1c – Trial Balance: Usefulness and Limitations

Extracts a trial balance from the given ledger account balances.

Question

Question:
c. Using the following list of balances extracted from the ledger accounts of John Thomas Enterprises, the MD/CEO wants you to confirm if the various double entries passed by the newly employed accounts officer were arithmetically correct:

Description	N’000
Revenue	53,000
Purchases	32,200
Property, Plant, and Equipment (Cost)	59,000
Accumulated Depreciation	25,000
Inventory as at July 1, 2018	7,800
Interest Expense	200
Administrative Expenses	7,000
Accrued Expenses	400
Distribution Cost	8,900
Retained Earnings	23,500
Bank Overdraft	1,000
Cash and Cash Equivalent	200
Accounts Receivables	9,000
Finance Cost	1,000
5% Loan Note	5,000
Share Capital	10,000
Other Components of Equity (OCE)	5,000
Accounts Payables	2,400

Required:
Extract a trial balance for the period ended June 30, 2019. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Double Entry, Extraction, Ledger, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2019

FA – Nov 2019 – L1 – SB – Q1b – Trial Balance: Usefulness and Limitations

Identifies errors that affect and do not affect the trial balance.

Question

b. The balancing of a trial balance does not necessarily mean that such trial balance is error-free.

Required:
Using a two-column tabular format, highlight FOUR errors that do not affect the trial balance and FOUR errors that affect the trial balance. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting principles, Errors, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2019

FA – Nov 2019 – L1 – SB – Q1a – Trial Balance: Usefulness and Limitations

Explains the definition of trial balance and identifies errors affecting and not affecting it.

Question

a. Explain the term trial balance. (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Double-entry Principles, Error Identification, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2019

FA – Nov 2019 – L1 – SA – Q13 – Trial Balance: Usefulness and Limitations

Identify the reason for the imbalance in the trial balance.

Question

An Accounts officer extracted a trial balance for the year ended October 31, 2019, and discovered that the debit side exceeded the credit side by N30,000. Which of the following could explain the reason for the imbalance?

A. Sales of N30,000 was omitted from the sales journal
B. Returns inwards of N15,000 was posted to the debit side of the trial balance
C. Discounts received of N15,000 were posted to the credit side of the trial balance
D. The bank ledger account did not agree with the bank statement by a debit of N30,000
E. N30,000 spent on repairs of office equipment was debited to office equipment account

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accounting Process, Errors, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: NOV 2019

FA – May 2016 – L1 – SB – Q1b – Trial Balance: Usefulness and Limitations

Listing four errors that the trial balance does not reveal.

Question

Mention FOUR errors that the trial balance will not reveal.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Commission, Errors, Omission, Principle, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: MAY 2016

FA – May 2016 – L1 – SB – Q1a – Trial Balance: Usefulness and Limitations

Define a trial balance and explain its purpose.

Question

Define a Trial Balance and explain its purpose.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Accuracy, Trial Balance
Level: Level 1

Topic: Trial Balance: Usefulness and Limitations
Series: MAY 2016

FA – May 2015 – L1 – Q4b – Trial Balance: Usefulness and Limitations

Prepare a trial balance from the extracted balances of Omoba Enterprises and recompute the entity’s capital for the period under review.

Question

The following balances were extracted from the books of Omoba Enterprises as at 31 December 2013:

Details	N’000
Accumulated depreciation	85,000
Administrative expenses	775,000
Accounts payables	585,000
Subscription	15,000
Rent and rates	130,000
Accounts receivables	475,000
Postage and stationery	125,000
Newspapers & periodicals	40,000
Utility	35,000
Allowances for Bad debt	85,000
Property, plant and equipment	925,000
Retained earnings	575,000
Audit fees	85,000
Revenue	2,500,000
Cost of sales	800,000
Other income	82,000
Cash and bank balances	882,000
Capital	375,000

Required:
i. Use the information above to extract a trial balance of Omoba Enterprises as at 31 December, 2013. (12 Marks)
ii. Use the information below to recompute the entity’s capital for the period under review:

Drawings: N250,000
Profit for the period: N315,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Capital, Financial Statements, Trial Balance
Level: Level 1