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Question
State whether the following statement is ‘True or False’ with reasons.
Agreement of Trial Balance always proves accounting accuracy.
Options
True
False
Solution
- A Trial balance is an abstract or list of all the ledger accounts as on a specific date showing debit and credit balances of all Ledger Accounts. When both the columns are totaled, they should match in order to ensure the arithmetical accuracy of the transactions entered. Recording of transactions is based on the dual-aspect concept, which states that for every debit, there must be a corresponding credit.
- There are some errors, such as complete omission and error of principle, which will not affect the agreement of the Trial Balance.
Thus, Agreement of Trial Balance will only show the arithmetical accuracy and not the accounting accuracy.
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RELATED QUESTIONS
Answer in one sentence only
What is Trial Balance?
Write the word, term, phrase, which can substitute the statement.
A Trial Balance in which only net balances of all ledger accounts are transferred.
State whether the following statements are ‘True or False’ with reasons.
Trial balance is based on the double entry principle that for every debit there is equal amount of corresponding credit.
After the preparation of ledger, the next step is the preparation of ____________.
The account which has a debit balance and is shown in the debit column of the trial balance is ____________.
Trial balance is prepared ____________.
Prepare a trial balance with the following information:
| Name of the account | ₹ | Name of the account | ₹ |
| Purchases | 1,00,000 | Sales | 1,50,000 |
| Bank Loan | 75,000 | Creditors | 50,000 |
| Debtors | 1,50,000 | Cash | 90,000 |
| Stock | 35,000 | Capital | 1,00,000 |
What are the methods of preparing trial balance?
