Question

What do you mean by Trial Balance? Discuss the objectives of preparing aTrial Balance.

Answer 1

Answer:

Explanation: After preparing ledger of all accounts,the balance of these ledger accounts are compiled into debit and credit account columns which end to be equal.This compiling is done in a bookkeeping worksheet called trial balance.It is a simple listing of nominal accounts with dr or cr balances being posted in dr and cr accounts respectively.

A statement of all debit and credit accounts in a double entry book is a trial balance.

The objectives of preparing a trial balance is as follows:-

i)As the debit and credit side of the balance should match,thus any mismatch would help in figuring out any error easily.

ii)It can easily help to ascertain the arithmetical accuracy,although cannot be completely dependent on.

iii)It is a helpful tool for preparation of further financial statements as all dr and cr accounts can be found here.

iv)It helps to check whether ledger accounts are correct and accurate ir not.