State whether the following statements are True or False:
Final Accounts are prepared on the basis of Trial Balance.

True

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False

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Solution

The correct option is A True
Yes, the given statement is correct.
A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger account (Accounts with zero balances will likely be omitted.) The debit balance amounts are listed in a column with the heading "Debit balances" and the credit balance amounts are listed in another column with the heading "Credit balances." The total of each of these two columns should be identical.
With the help of trial balance final accounts i.e., trading account, profit & loss account and balance sheet is prepared. Items of revenue nature shown in trading and profit & loss account and items of capital nature are shown in balance sheet.

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Similar questions

Q. State whether the following statement is True or False.
In preparation of gross trial balance, ledger account balances are extracted.

Q. State whether the following statement is True or False.
Trial balance is prepared just before the preparation of final accounts.

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Q. State whether the following statement is True or False.
Balances of ledger accounts are posted to trial balance.

Q. State whether the following statement are True or False.

Trial Balance is the base of Final account.

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State whether the following statements are True or False:Final Accounts are prepared on the basis of Trial Balance.

State whether the following statements are True or False:
Final Accounts are prepared on the basis of Trial Balance.