2.4 Learning Objective 2-4
1) The trial balance is also known as the balance sheet.
2) The trial balance verifies the equality of debits and credits on a specific date.
3) A trial balance is the list of only a company’s asset and liability accounts, along with their account
numbers, at a point in time.
4) A trial balance is a list of all of the ledger accounts of a company with their balances at a point in time.
5) In a trial balance, total debits must always equal total credits.
6) The trial balance is an internal document used only by employees of the company.
7) A trial balance summarizes the ledger by listing all the accounts with their balances at a point in time.
8) The trial balance reports the balances of assets, liabilities, and equity.
9) Which of the following is used by both internal and external users?
A) Chart of Accounts
B) Trial Balance
C) Balance Sheet
D) Costing Reports
10) Which of the following statements is true of a trial balance?
A) A trial balance has the same format as a balance sheet.
B) A trial balance presents data in debit and credit format.
C) A trial balance shows the total amounts of assets and liabilities, but not equity.
D) A trial balance is prepared after the balance sheet.
11) Which of the following sequences states the order in which accounts are listed on a trial balance?
A) Equity → Assets → Liabilities
B) Liabilities → Assets → Equity
C) Assets → Equity → Liabilities
D) Assets → Liabilities → Equity
12) Which of the following statements is true of a trial balance?
A) A trial balance is the first step in the accounting cycle.
B) A trial balance is also known as a balance sheet.
C) A trial balance is a list of all accounts with their balances.
D) A trial balance is also known as the chart of accounts.
13) The following are the current month’s balances for ABC Financial Services, Inc. before preparing the
trial balance.
Accounts Payable
$5,000
Revenue
3,000
Cash
2,000
Expenses
15,500
Furniture
13,000
Accounts Receivable
12,000
Common Stock
?
Notes Payable
8,500
What amount should be shown for Common Stock on the trial balance?
A) $50,000
B) $26,000
C) $13,500
D) $27,000
14) The following are selected current month’s balances for Morgan, Inc.
Accounts Payable
$9,000
Revenue
11,000
Cash
3,150
Expenses
1,600
Furniture
13,000
Accounts Receivable
16,000
Common Stock
7,250
Notes Payable
6,500
Based on this information, calculate the total amount of credits for the trial balance.
A) $26,500
B) $22,750
C) $24,750
D) $33,750
15) The following are selected current month’s balances for Allbright Enterprises.
Accounts Payable
$8,000
Revenue
12,000
Cash
6,000
Expenses
1,300
Furniture
10,000
Accounts Receivable
14,000
Common Stock
7,250
Notes Payable
4,050
Based on this information, calculate is the total amount of debits for the trial balance?
A) $24,000
B) $25,300
C) $30,000
D) $31,300
16) Jackson Enterprises is a new corporation. The following transactions occurred during the first month
of business.
Prepare journal entries and post the journal entries to T-accounts.
Prepare a trial balance at the end of the first month using the following transactions.
a) Received $15,000 cash and issued common stock.
b) Paid the first month‘s rent with $800 cash.
c) Purchased equipment by paying $4,000 cash and executing a note payable for $4,000.
d) Purchased office supplies for $200 cash. The supplies remain at the end of the month.
e) Billed clients for a total of $7,000 for design services rendered.
f) Received $1,000 cash from clients for services rendered above.
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Jackson Enterprises
Trial Balance
Last Day of Month
Account Title Debit Credit
Cash $11,000
Accounts Receivable 6,000
Office Supplies 200
Equipment 8,000
Notes Payable $4,000
Common Stock 15,000
Service Revenue 7,000
Rent Expense 800 ______
Total $26,000 $26,000
Explanation:
Note:
Cash balance is calculated as:
Common stock issued $15,000
Rent paid (800)
Cash paid for equipment (4,000)
Office supplies purchased (200)
Cash received from clients 1,000
Cash balance $11,000
Diff: 3
LO: 2-1, 2-3, 2-4
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2: What is the Trial Balance (H1)
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17) Musical Instruments, Inc. sells musical instruments. On December 31, 2019, after its first month of
business, Musical Instruments, Inc. had the following balances in its accounts, listed alphabetically.
Accounts Receivable
$ 5,000
Accounts Payable
15,000
Advertising Expense
2,000
Building
16,500
Cash
?
Common Stock
50,000
Dividends
1,200
Equipment
2,000
Land
70,000
Notes Payable
60,000
Office Supplies
3,400
Prepaid Rent
1,200
Salaries Expense
4,000
Service Revenue
72,000
Utilities Expense
4,100
Determine the balance in the cash account and prepare the trial balance.