Examgyani Team
Asked: November 5, 20232023-11-05T18:53:50+05:30
2023-11-05T18:53:50+05:30In: Commerce
What are the objectives of preparing a trial balance?
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Answer:
A Trial balance is prepared with the following objectives:
1. To ascertain the arithmetical accuracy of ledger accounts:
A Trial balance is prepared to check the arithmetical accuracy of ledger accounts. If the sum of the debit and credit columns of the Trial balance is equal, it is assumed that the posting to the ledger accounts is accurate. This is because for every debit we give equal credit.
2. To help in ascertaining errors:
Some of the errors in the books of account can be detected by the trial balance. An untallied trial balance indicates that some errors have been committed.
3. To provide a basis for preparing final accounts:
The ultimate aim of maintaining books of accounts is to ascertain the financial result and position of the business. For this purpose profit and loss accounts and balance sheets are prepared based on the trial balance.