What is the purpose of the balance c/d shown in a ledger account at the end of a period?
Correct answer: B. To bring the balancing amount to the next period
- A. To close the account permanently
- B. To bring the balancing amount to the next period
- C. To record a new transaction in the account
- D. To transfer every balance to the trial balance
Explanation
Balance c/d means balance carried down. It is entered to make both sides of the account equal and is then brought down as balance b/d in the next accounting period. It does not itself represent a new transaction.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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