Question

State whether the following statement is True or False.
A Trial balance shows only arithmetical accuracy.

• A. True
• B. False

Answer 1

The correct option is A True

Trial balance is an important statement in the accounting process, which shows final position of all accounts and helps in preparing the final statements.

The objective of trial balance is to ascertain the arithmetical accuracy of the ledger accounts. The purpose of preparing a trial balance is to ascertain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced. As a summary of the ledger, it is a list of the accounts and their balances. When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct. However, the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts. It only ensures that all debits and the corresponding credits have been properly recorded in the ledger.