ACCA Applied Knowledge · Financial Accounting · Trial balance
Which statement best describes the main purpose of a trial balance prepared at the end of an accounting period?
The main purpose of a trial balance is to check that total debit balances equal total credit balances in the ledger. It tests the arithmetic of double entry only. It cannot prove correct classification or completeness, and it is not a published financial statement.
- ATo prove that every transaction has been recorded in the correct account
- BTo check that total debit balances equal total credit balances in the ledgerCorrect
- CTo show the financial position of the entity to external users
- DTo confirm that no transactions have been omitted from the books
Explanation
A trial balance lists all ledger balances and checks that total debits equal total credits, which is the arithmetic accuracy of double entry. It does not prove transactions are in the right accounts or that none were omitted, since such errors keep the totals equal. It is also an internal working list, not a published statement.
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