Question

Which of the following is/are method for preparation of trial balance?

• A. Balances Method
• B. Totals Method
• C. Both (A) & (B)
• D. None of the above

Answer 1

Answer: (C)

Both (A) & (B)

Trial balance is normally prepared at the end of the financial year to check whether all entries are posted in the ledger. If trial balance agrees, it proves that books are arithmetically correct. Trial balance can be prepared by various methods:

1) Balance method in which only net balances of each account are carried to trial balance depend on the balance i.e. debit or credit.

2) Totals method in which the total of both the sides i.e. debit and credit are carried to the trial balance.