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      Question

      The purpose of trial balance is to know about the :

      A Financial performance of the company Correct Answer Incorrect Answer
      B Financial position of the company Correct Answer Incorrect Answer
      C Liquidity position of the company Correct Answer Incorrect Answer
      D Arithmetical accuracy of the accounts of the company Correct Answer Incorrect Answer
      E All of the above Correct Answer Incorrect Answer

      Solution

      A trial balance is a accounting report that lists the balances in each of the company's general ledger accounts.ย  Since accounting is done on a double-entry system, the total of debit and credit balances should be equal. A disagreement in the trial balance indicates an error and therefore a trial balance helps in checking the arithmetic accuracy of preparation of accounts.

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