Question

Which of the following pictorial representations is often used to explain the nature of the balance sheet?

a) Pie chart
b) Bar graph
c) Flowchart
d) T-account

Answer 1

Option (d), A T-account is the pictorial representation commonly used to demonstrate the nature of a balance sheet, which is organized in a two-column T-shape format.

Step-by-step explanation:

The pictorial representation often used to explain the nature of the balance sheet is the T-account. A balance sheet is typically set up in a two-column format that resembles the letter T. This T-shape is formed by the vertical line down the middle, separating assets on one side from liabilities and equity on the other, and by the horizontal line under the headings 'Assets' and 'Liabilities' at the top.

Unlike a pie chart, which shows how a total is divided into different portions, or a bar graph which compares various entities, the T-account gives a clear visual structure for balancing debits and credits in accounting records.