what is the reason for agreement of “trial balance” ?
Answers
Answer:
The purpose of a trial balance is to prove that the value of all the debit value balances equals the total of all the credit value balances. If the total of the debit column does not equal the total value of the credit column then this would show that there is an error in the nominal ledger accounts.
Answer:
The purpose of a trial balance is to prove that the value of all the debit value balances equals the total of all the credit value balances. If the total of the debit column does not equal the total value of the credit column then this would show that there is an error in the nominal ledger accounts.
A trial balance contains the columns – serial number of ledger accounts, Account titles, Ledger folio, debit balance, and credit balance. If a trial balance agrees i.e. a total of debit money column and a total of credit money column are equal, it proves that the ledger accounts are arithmetically accurate.
There are certain errors that a trial balance will not detect such as posting on both sides to a wrong ledger account, transposing debit and credit entries in the general ledger and making two errors that cancel each other out. Once errors are detected, a suspense account is created.