Trial balance is prepared to check accuracy of_______________?
Correct answer: D. Ledger accounts balances
- A. Cash flow statement balances
- B. Balance sheet balances
- C. Income statement balances
- D. Ledger accounts balances
Explanation
A trial balance lists the debit and credit balances extracted from ledger accounts, so it checks their arithmetical agreement. It does not directly test the balances of individual financial statements.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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