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प्रश्न
Describe the purpose for the preparation of trial balance
उत्तर
The important purposes for which the trial balance was prepared are explained with the help of the following points:
1. Ascertain the arithmetical accuracy of ledger accounts – The trial balance helps to ascertain whether all the debits and credits are properly recorded in the ledger.
When the debit and the credit balances are equal, it is said that the posting and the balancing of the accounts is arithmetically correct.
However, the tallying of the trial balance cannot be considered as a conclusive proof of accuracy of the books.
2. Helps in locating errors – When a trial balance does not tally, it helps in detecting or locating the errors.
The error may have occurred at any one of the stages of an accounting process; namely,
1. Totaling of the subsidiary books
2. Posting of journal entries in the ledger
3. Calculating account balances
4. Carrying account balances to the trial balance
5. Totaling the trial balance columns
3. Helps in the preparation of the financial statements – Trial balance is a statement which lists the debit and credit balances of all ledger accounts and helps in the preparation of the financial statements.
Hence, it is considered as a connecting link between the accounting records and the preparation of financial statements.
APPEARS IN
संबंधित प्रश्न
Which of the following is/are the objective(s) of preparing trial balance?
State whether the balance of the following accounts should be placed in the debit or the credit column of the trial balance:
- Carriage outwards
- Carriage inwards
- Sales
- Purchases
- Bad debts
- Interest paid
- Interest received
- Discount received
- Capital
- Drawings
- Sales returns
- Purchase returns
What are the objectives of preparing trial balance?
‘A trial balance is only a prima facie evidence of the arithmetical accuracy of records’. Do you agree with this statement? Give reasons.
As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of ₹ 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pen-drive for ₹ 3,500 was posted from the journal to the ledger with a ₹ 3,500 debit to Office Equipment and another ₹ 3,500 debit to creditors accounts.
Answer each of the following questions and present the amount of any misstatement:
(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?
(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?
(c) Is the debit column total of the trial balance overstated, understated, or correctly stated?
(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?
(e) If the debit column total of the trial balance is ₹ 2,40,000 before correcting the error, what is the total of credit column.
