CA Foundation · Accounting · Accounting Process
Which statement about a trial balance is correct?
A trial balance is a statement of debit and credit balances of ledger accounts as on a given date. It can be prepared at any time, checks arithmetical accuracy of posting only, and is not conclusive proof that books are error-free, nor a part of final accounts.
- AAgreement of the trial balance proves the books are free from errors
- BIt is prepared only at the end of the financial year
- CIt is a statement of debit and credit balances of ledger accounts as on a given dateCorrect
- DIt is a part of the final accounts
Explanation
A trial balance lists ledger balances, debit and credit, on a given date to check arithmetical accuracy of posting. It can be prepared at any time, not only at year end. Agreement is not conclusive proof of accuracy since compensating errors, omissions and errors of principle remain hidden. It is a working statement, not part of the final accounts.
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