Question

The main purpose of preparing a trial balance is _________.

• A. To prepare a summary of all the balance
• B. To compare the debit balance with credit balance
• C. To locate all types of frauds
• D. To check the arithmetic accuracy of the ledger accounts

Answer 1

The correct option is D To check the arithmetic accuracy of the ledger accounts

Trial Balance is prepared by listing of all ledger balances. The statement in which the debit and credit balances are noted down and finally totaled up to ascertain if they are equal, is called Trial Balance.

The primary object of preparing the trial balance:

1) It is to check the accuracy of posting. If the trial balance agrees it proves that books are arithmetically accurate and both the aspects of all the transactions are correctly recorded.

2) It brings together the balances of all accounts at one place.