State with reasons whether the following statement is true or false:
Trial Balance is prepared after preparing the Profit and Loss A/c.

True

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False

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Solution

The correct option is B False
False. Trial balance is prepared before preparation of Profit and loss A/c and is prepared after all the ledger accounts are balanced. After the trial balance is made only then the final accounts are prepared.

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Similar questions

Q. State whether the following statement is True or False.
A trial balance is prepared only once in a year.

Q. State whether the following statement is True or False.
A Trial balance can be prepared monthly, quarterly, weekly or yearly also.

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

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

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.

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State with reasons whether the following statement is true or false:Trial Balance is prepared after preparing the Profit and Loss A/c.

The correct option is B FalseFalse. Trial balance is prepared before preparation of Profit and loss A/c and is prepared after all the ledger accounts are balanced. After the trial balance is made only then the final accounts are prepared.

State with reasons whether the following statement is true or false:
Trial Balance is prepared after preparing the Profit and Loss A/c.

The correct option is B False
False. Trial balance is prepared before preparation of Profit and loss A/c and is prepared after all the ledger accounts are balanced. After the trial balance is made only then the final accounts are prepared.