CSEET · Fundamentals of Accounting · Accounting Process
Which statement about a trial balance is correct?
A trial balance is a statement listing the debit and credit balances of ledger accounts on a given date. It checks the arithmetical accuracy of double entry, but agreement does not prove the books are error-free, because several errors do not affect the totals.
- AIt is a ledger account prepared at the end of the year
- BIt is a statement of debit and credit balances of ledger accounts at a given dateCorrect
- CIt proves that no error has been made in the books
- DIt is prepared before the journal entries are posted to the ledger
Explanation
A trial balance is a statement, not an account, listing ledger balances at a date to check arithmetical accuracy of the double entry. Agreement does not prove absence of errors, since errors of omission, principle and compensating errors remain hidden. It is prepared after posting and balancing the ledger.
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