Q: Which formula correctly calculates the ending balance of an account using a T-account?

$$\text{Ending Balance} = \text{Total Debits} - \text{Total Credits}$$

Question 1

Which of the following best describes the purpose of a trial balance in financial accounting?

Accepted Answer

To ensure that total debits equal total credits before preparing financial statements

Question 2

Given the following T-account for Cash:

$$\begin{array}{c|c}
	ext{Debit} & 	ext{Credit} \
5000 & 8000 \
3000 & 1000 \
10000 & 500 \
\end{array}$$

What is the ending balance of the Cash account?

Accepted Answer

$$\13$$,500$

Question 3

In the trial balance, which account type is typically listed first?

Accepted Answer

Assets

Question 4

If Accounts Receivable has a debit balance of $$\1$$,000$$ and Accounts Payable has a credit balance of $$\$$2,000$$, what is the net effect on the company's working capital?

Accepted Answer

Decrease by $$\1$$,000$ (since liabilities exceed receivables)

Question 5

Which of the following transactions would increase both assets and liabilities on the trial balance?

Accepted Answer

Purchasing inventory on credit

Question 6

A company records a $$\5$$,000$ expense for wages. How does this affect the trial balance?

Accepted Answer

Increase expenses and decrease cash

Question 7

If the total debits in the trial balance are $$\30$$,000$$ and total credits are $$\$$28,000$$, what does this indicate?

Accepted Answer

There is a $$\2$$,000$ error that must be investigated

Question 8

Which formula correctly calculates the ending balance of an account using a T-account?

Accepted Answer

$$	ext{Ending Balance} = 	ext{Total Debits} - 	ext{Total Credits}$$

Question 9

Which account would typically have a credit balance in the trial balance?

Accepted Answer

Accounts Payable

Question 10

A company receives $$\2$$,000$ from a customer for services to be performed next month. How should this be recorded in the trial balance?

Accepted Answer

Debit Cash $$\2$$,000$$, Credit Unearned Revenue $$\$$2,000$$

Question 11

If a company purchases supplies for $$\500$ cash, what is the effect on the trial balance?

Accepted Answer

Increase Supplies $$\500$, Decrease Cash $$\$$500$$

Question 12

Which of the following is NOT a step in preparing a trial balance?

Accepted Answer

Post adjusting entries

Question 13

A company pays $$\1$$,000$ to settle an account payable. What is the effect on the trial balance?

Accepted Answer

Decrease Cash $$\1$$,000$$, Decrease Accounts Payable $$\$$1,000$$

Question 14

Which of the following best describes the order of accounts in a trial balance?

Accepted Answer

Assets, liabilities, equity, revenue, expenses

Question 15

If the trial balance shows a debit balance in the Wages Expense account, what does this indicate?

Accepted Answer

Wages have been paid and recorded as an expense

Question 16

A company issues common stock for $$\10$$,000$ cash. How is this transaction reflected in the trial balance?

Accepted Answer

Debit Cash $$\10$$,000$$, Credit Common Stock $$\$$10,000$$

Question 17

If a company has the following balances: Cash $$\5$$,000$$, Accounts Receivable $$\$$1,000$$, Supplies $$\500$, Accounts Payable $$\$$2,000$$, Common Stock $$\3$$,000$, what is the total assets?

Accepted Answer

$$\6$$,500$

Question 18

Which of the following errors would NOT be detected by preparing a trial balance?

Accepted Answer

Omitting a transaction entirely

Question 19

A company records $$\3$$,000$$ in revenue and $$\$$1,000 in $$expenses. What is the net income?

Accepted Answer

$$\2$$,000$

Question 20

If a company has total assets of $$\20$$,000$$ and total liabilities of $$\$$8,000$$, what is the equity?

Accepted Answer

$$\12$$,000$

Understanding Trial Balance in Financial Accounting

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