Which of the following statements is correct in relation to a trial balance?

It shows the financial position of a business.

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All the balances in the trial balance will be summarized on the business balance sheet.

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It is a list of balances and forms the starting point for the preparation of the business accounts.

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None of the above.

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Solution

The correct option is A It is a list of balances and forms the starting point for the preparation of the business accounts.
It is a list of balances and forms the starting point for the preparation of the business accounts.

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Similar questions

Q. Select the most appropriate alternative from those given below and rewrite the statement.

A statement showing financial position of the business is called as _________________.
a) balance sheet
b) trial balance
c) capital
d) trading A/c

State true or false:

1) A Trial balance is an account.
2) A Trial balance is helpful for preparation of final accounts.
3) A Trial balance is most important document.
4) A Trial balance may be prepared on any date.
5) In Trial balance opening stock is recorded in credit balance column.
6) Both sides total of an account are taken in Gross Trial Balance.
7) Purchase account always shows debit balance.
8) A Trial balance is a List of Ledger balances.
9) A Trial balance does not ensure accounting accuracy.
10) A Trial balance shows only arithmetical accuracy.

Q. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reasons (R).

Assertion (A) - The income statement and the balance sheet are financial statements that show the cash flows in and out of the business unit.

Reason (R) - The general purpose of financial statements is to show the financial position and performance of a business unit.

In the context of the above two statements, which of the following is correct?

[0.88 marks]

Q. What is the correct sequence of the following action required for the preparation of Final Accounts?
(1) Preparation of Trial Balance
(2) Balancing of Accounts
(3) Preparation of Annual Financial Statements
(4) Marking Adjusting Entries
Select the correct answer from the codes given below:-

Q. The following is the Trial Balance prepared by an inexperienced accountant. Redraft it in a correct form and give necessary notes : −

TRIAL BALANCE
for the year ending 31st March, 2017

Particulars	Amount	Particulars	Amount
	₹		₹
Cash in Hand	5,200	Bank Overdraft	16,400
Plant & Machinery	75,000	Capital	50,000
Typewriter	6,400	Goodwill	8,000
Stock (1-4-2016)	13,100	Sundry Creditors	8,200
Purchases	84,100	Sales	1,60,000
Carriage Inwards	2,800	Return Inwards	2,400
Carriage Outwards	1,600	Drawings	2,120
Sundry Debtors	18,300	Investments	4,000
Bills Payable	12,000
Rent Paid	9,600
Wages	16,500
Advertisement	4,500
Discount Received	3,200
	2,52,300		2,51,120

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Which of the following statements is correct in relation to a trial balance?

The correct option is A It is a list of balances and forms the starting point for the preparation of the business accounts.It is a list of balances and forms the starting point for the preparation of the business accounts.

The correct option is A It is a list of balances and forms the starting point for the preparation of the business accounts.
It is a list of balances and forms the starting point for the preparation of the business accounts.