CMA Foundation · Fundamentals of Financial and Cost Accounting · Trial Balance
Which statement about the 'total and balances method' of preparing a trial balance is correct?
The total and balances method combines the totals method and the balances method by showing both the total debits and credits of each account and its closing debit or credit balance in separate columns. It is prepared after ledger posting, not before.
- AIt shows only the net balance of each account in one column
- BIt combines the totals method and balances method by showing both totals and balances in separate columnsCorrect
- CIt lists only accounts having debit balances
- DIt is prepared before posting to the ledger
Explanation
The total-cum-balances method has columns for debit total, credit total, debit balance and credit balance. It therefore merges the two methods. Net-only listing is the balances method, and a trial balance is always prepared after ledger posting.
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