ACCA Applied Knowledge · Financial Accounting · Trial balance
Which one of the following ledger account balances would normally be a credit balance in a trial balance?
A loan from a bank is normally a credit balance because it is a liability. Prepayments are assets, drawings reduce owner's equity, and sales returns reduce revenue, so all three of those normally carry debit balances in the trial balance.
- APrepayments
- BDrawings
- CSales returns
- DLoan from a bankCorrect
Explanation
A bank loan is a liability, and liabilities have credit balances. Prepayments are assets, drawings reduce equity and are debits, and sales returns are an expense-type contra-revenue account carrying a debit balance.
Did you get it right without looking?
One question tells you little. A timed set on Trial balance shows your real accuracy, how long you take and where you lose marks.
More Trial balance questions
- Which one of the following is an example of a compensating error?
- Dunmore Co's trial balance includes these extracts: sales $620,000; sales returns $14,000; purchases $350,000; purchase returns $9,000; open…
- At 31 December, Kestrel Co's receivables ledger control account shows: opening balance $42,000 debit; credit sales $168,000; cash received f…
- A business paid $450 for repairs to a delivery van. The bookkeeper debited the van cost account (non-current assets) with $450 and credited …
- Which of the following is a correct description of the format of a trial balance?
- A trial balance for Delta Co balanced. Later it was found that (1) a $900 payment of electricity was debited to the rent account, and (2) sa…