Multiple Choice
The opening balance of your most recent statement should equal which of the following?
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2. Transaction Analysis
Trial Balance
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A trial balance will not balance if:
A
A liability is classified as an asset.
B
A transaction is completely omitted from the books.
C
An expense is recorded in the wrong expense account.
D
A debit entry is recorded as a credit in the ledger accounts.
Verified step by step guidance1
Understand the purpose of a trial balance: A trial balance is a report that lists all ledger account balances to ensure that total debits equal total credits. If they do not match, it indicates an error in the accounting records.
Analyze the options provided in the problem: Evaluate each scenario to determine whether it would cause the trial balance to not balance.
Option 1: 'A liability is classified as an asset.' This would not cause the trial balance to be unbalanced because the total debits and credits would still match, even though the classification is incorrect.
Option 2: 'A transaction is completely omitted from the books.' This would not affect the trial balance because both the debit and credit sides of the transaction are missing, keeping the totals equal.
Option 4: 'A debit entry is recorded as a credit in the ledger accounts.' This would cause the trial balance to not balance because the debit and credit sides would no longer match, creating an imbalance in the totals.
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