Which of the following statements is correct?
The balance of the liabilities account is shown in the credit column of the trial balance.
The correct answer is option 4. In a trial balance, liabilities are shown on the credit side, while assets and expenses are typically shown on the debit side. Therefore, the balance of liabilities accounts, such as loans or creditors, are placed in the credit column of the trial balance. The other options are incorrect as they misstate how certain accounts are handled in the trial balance.
Important Questions from Basics of Accounting
Match the following accounting concepts with the meaning/implications.
Accounting
Concept
Meaning
Implication
(i)
Money
measurement
concept(a)
Capital of the proprietor is considered as a liability
(ii)
Business
entity concept(b)
Fixed assets are
valued on a cost basis(iii)
Going concern concept
(c)
Changes in purchasing power are ignored
Which of the following statements is INCORRECT?
Which of the following statements is correct?
______ is defined as a statement or a list of all ledger account balances taken from various ledger books on a particular date to check the arithmetical accuracy.
Accounting is rightly referred to as the '________' of business.
