Question

Write any five significances of repairing Trail Balance

Answer 1

Answer:

Trial balance helps a professional accountant to balance or check both debit and credit items of income, expenses, assets, and liabilities are correctly recorded or posted. ... Trial Balance, aside from general ledger accounts, is also useful to check the accuracy of special-purpose accounting books.

Explanation:

Answer 2

Answer:

A trial balance is like a bookkeeping worksheet the company prepares at the end of the financial year. Basically, it is an account that lists the closing balance of each account on the respective debit or credit side. Preparing the trial balance is the third step of the accounting process.

Significances:

• It ensures that the posting from the ledgers is done correctly. If there are any arithmetic errors in the accounting then this will get reflected in the trial balance. And we can determine this when the total of the debit column and the credit column do not match.

• Similarly, it will also detect clerical errors, like a fault in posting, mixing up of figures, etc.

• Trial balance will also help in the preparation of the final accounts. The balances for the financial statements are taken from the trial balance.

• And the trial balance will also serve as a useful summary of all accounting records. It is a summary of all the ledger accounts of a firm. We will only refer to the individual ledger accounts if any details are needed. Otherwise, we rely on the trial balance.

• Ensures that the total of all debits equals the total of all the credits.