Which Of The Following Statements Explains What A Trial Balance Is?
The correct answer of this multiple choice (mcq) is (D), as a Trial Balance is a confirmation that the sum of all the debit accounts’ balances, which include Expenses and Assets, equals to the sum of all the credit accounts’ balances, which include Revenues, Liabilities and Equity. This equality should maintain throughout the accounting period under the Double Entry System of Bookkeeping . So, we get the monetary value of list of all accounts at one place. After trial balance is prepared which is an Unadjusted Trial Balance , Adjusting Trial Balance in order to get the updated value of all the accounts that need Adjustments . This ADT forms the basis for the preparation of Financial Statements which are reported to Users of Accounting Information. A TB is prepared for the current accounting period. The advantage of TB is that it detect posting errors, casting errors, one-sided errors, transposition errors, (where amounts are exchanged in part of other i.e., write the amount inc...