Question

Fill in the blanks with correct alternative and rewrite the statements :

The Trial Balance shows only _______ accuracy.
a) arithmetical
b) accounting
c) historical
d) financial

Answer 1

The Trial Balance shows only arithmetical accuracy.

Explanation:
A Trial Balance is prepared with the balances of all the ledger accounts. When both the columns are totaled, they should match in order to ensure the arithmetical accuracy of the transactions entered. Recording of transactions is based on the dual-aspect concept, which states that for every debit, there must be a corresponding credit. Thus, a Trial Balance shows only arithmetical accuracy and not accounting accuracy.

A tallied Trial Balance will only show the arithmetical accuracy and not the accounting accuracy, as there are some errors, such as complete omission and error of principle, which will not affect the agreement of the Trial Balance.