Trial Balance Questions and Answers [With PDF]

A trial balance is the quick health check of your books. If its two sides agree, your double entry work is arithmetically correct. If they do not, you need to know where to look. Here are 25 important questions on this chapter, answered in plain language with a checked worked problem.

This is Chapter 9 of our Accounting course. It uses the balances you learned to find in the Ledger and Cash Book chapters.

Meaning, Objectives and Features

Q1. What is a trial balance?

A trial balance is a list of all ledger account balances (including the cash book balances) on a particular date, with debit balances in one column and credit balances in the other. If the books are arithmetically correct, the two columns have the same total.

Q2. What are the objectives of a trial balance?

• To check that debits and credits have been correctly posted from the journal to the ledger.
• To check the arithmetical accuracy of the books under double entry.
• To help find errors in the journal and ledger.
• To bring all ledger balances together in one place.
• To provide figures for preparing the financial statements.

Q3. What are the features of a trial balance?

• It is not an account and is not part of the double entry records. It is only a statement.
• It is prepared on a separate sheet, not in a book of account.
• It is prepared from ledger balances at the end of a period.
• It is prepared before the financial statements.

Q4. What are the advantages of a trial balance?

• It checks arithmetical accuracy.
• It helps detect and correct some errors.
• It gives a quick view of all account balances.
• It makes preparing the final accounts easier.
• It confirms that the double entry system has been followed.

Q5. What are the limitations of a trial balance?

• It does not detect all errors.
• Agreeing totals are not conclusive proof that the books are accurate.
• It is not part of the books of account, so it is not a legal record.

Preparation

Q6. What is the procedure for preparing a trial balance?

1. Record transactions in the journal and post them to the ledger.
2. Total and balance every ledger account, including the cash and bank columns.
3. On a separate sheet, list each account name.
4. Write debit balances in the debit column and credit balances in the credit column.
5. Total both columns. If the totals agree, the books are arithmetically correct.

Q7. What are the methods of preparing a trial balance?

Q8. What columns does a trial balance have?

• Serial or code number: a number for each account.
• Account name: for example Cash, Sales or Purchases.
• L.F.: the ledger page where the account is found.
• Debit: accounts with debit balances.
• Credit: accounts with credit balances.

Q9. Why do the two sides of a trial balance agree?

Under double entry, every transaction has an equal debit and credit. When entries are posted correctly to the ledger, total debits equal total credits across all accounts. Because the trial balance lists the balances of those accounts, its two columns also agree.

Q10. Which balances go on the debit side?

• Assets (land, building, machinery, furniture, stock, debtors, cash, bank)
• Expenses and losses (purchases, salaries, advertising, bad debts)
• Prepaid expenses and accrued income
• Drawings and sales returns (returns inward)

Q11. Which balances go on the credit side?

• Liabilities (creditors, bills payable, loans, bank overdraft)
• Incomes and gains (sales, commission received, interest received)
• Outstanding expenses and income received in advance
• Capital and reserves
• Purchases returns (returns outward) and discount received

Errors and the Trial Balance

Q12. Which errors can a trial balance detect?

Errors that make total debits different from total credits:

• Posting only one side of a transaction (debit or credit missed).
• Posting a different amount on each side.
• Wrong totalling or balancing of a ledger account.
• Carrying a balance to the trial balance with the wrong amount or in the wrong column.
• Wrong addition of the trial balance columns.
• Omitting an account balance from the trial balance.

Q13. Which errors can a trial balance NOT detect?

Errors that affect both sides equally, so the totals still agree:

Q14. How do you find errors when the trial balance does not agree?

1. Re-add both columns of the trial balance.
2. Check that every ledger balance has been copied correctly and into the right column.
3. Check the totalling and balancing of each ledger account, including the cash book.
4. Check the posting from the journal to the ledger.
5. Look at the difference. If it is divisible by 2, an entry may have been posted on the wrong side. If it is divisible by 9, digits may have been swapped (for example 54 written as 45).
6. Check whether any balance has been left out.

If you cannot find the error quickly, put the difference in a suspense account so the final accounts can be prepared, and keep searching.

Q15. What is a suspense account?

A suspense account is a temporary account that holds the difference between the two sides of a trial balance until the errors are found. If the debit total is bigger, the suspense account is shown on the credit side. If the credit total is bigger, it is shown on the debit side.

Q16. How is a suspense account closed?

When the errors are found, rectifying journal entries are made through the suspense account. Once all errors are corrected, its balance becomes zero and it is closed. If some errors are still unfound, the balance remains and is shown in the balance sheet until they are discovered.

Q17. What is an error of omission? Give an example.

A transaction is not recorded at all, or one side of it is missed entirely in the same way. Example: goods sold to Green for 5,000 are never entered. Both the debit and the credit are missing, so the trial balance still agrees. (If only one side is omitted, the trial balance will not agree.)

Q18. What is an error of commission? Give an example.

A mistake in the amount or the account, made while recording. Example: goods of 3,000 are sold to Green but recorded as 30,000. Sales and Green’s account are both overstated by 27,000, so the trial balance agrees.

Q19. What is an error of posting to a wrong account?

The right amount is posted, but to the wrong account of the same type. Example: Green pays 3,000 cash. The cash book is debited correctly, but Yellow’s account is credited instead of Green’s. Total credits are still 3,000, so the trial balance agrees, but two personal accounts are wrong.

Q20. What are compensating errors?

Two or more errors that cancel each other. Example: Green’s account is debited with 200 instead of 2,000 (short by 1,800), and Yellow’s account is credited with 200 instead of 2,000 (short by 1,800). The debit and credit totals are both 1,800 lower, so they still agree.

Q21. What is an error of principle?

An error caused by breaking an accounting principle. Example: buying furniture (a capital item) but recording it as purchases or repairs (a revenue expense). The trial balance agrees, but profit and assets are wrong.

Closing Stock, Format and Worked Problem

Q22. How is closing stock treated in the trial balance?

Closing stock is normally not in the trial balance, because it is found by counting stock at the end of the period and is dealt with as an adjustment. The trial balance then shows opening stock and purchases. If closing stock is shown in the trial balance (on the debit side), the purchases figure has already been adjusted, so opening stock is not shown separately.

Q23. How do you calculate adjusted purchases?

Adjusted purchases = Opening stock + Purchases + Expenses on purchases – Closing stock. Example: 3,000 + 4,000 + 500 – 1,500 = 6,000. This is the cost of goods sold.

Q24. What is the format of a trial balance?

Name of the organization
Trial Balance as at (date)

Q25. How do you prepare a trial balance from these balances?

The following balances were taken from the books of Z Traders on 31 December 2026. Prepare a trial balance.

Notes: The closing stock of 1,500 is an adjustment, so it is left out of the trial balance. Commission is taken as commission paid (a debit), and the cash at bank and bank overdraft are treated as balances in two different bank accounts.

Check: Debits 3,000 + 4,000 + 2,000 + 1,000 + 500 + 5,000 + 700 + 200 + 300 + 100 + 200 + 3,000 + 2,000 = 22,000. Credits 14,900 + 6,000 + 1,000 + 100 = 22,000. Both columns agree.

Quick Revision Points

• The trial balance lists ledger balances. Total debits equal total credits.
• It detects one-sided errors and wrong totals, not errors that affect both sides equally.
• Undetected: omission, commission, compensating, principle, original entry and reversal.
• A suspense account temporarily holds the difference.
• Closing stock is usually not in the trial balance.

Take the chapter quiz below, then continue to Accounting Principles.