CMA Foundation · Fundamentals of Financial and Cost Accounting · Trial Balance
Which statement about a trial balance is correct?
A trial balance is a statement of ledger account balances, drawn up as on a particular date, to check that debit and credit totals agree. It is not a ledger account, can be prepared at any time, and does not prove the absence of errors.
- AIt is a ledger account in which balances are recorded
- BIt is a statement of ledger balances prepared on a particular dateCorrect
- CIt is prepared only at the end of the financial year, never earlier
- DIt proves that no errors exist if the totals agree
Explanation
A trial balance is a statement, not an account, listing debit and credit balances of ledger accounts as on a given date. It can be prepared at any time, such as monthly. Agreement of totals does not prove errors are absent, since compensating errors and errors of principle remain hidden.
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