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Questions and Answers
What is the purpose of a trial balance?
What is the purpose of a trial balance?
- To determine the order of liquidity of ledger accounts
- To prove that the debit value balances equal the credit value balances (correct)
- To list all general ledger accounts in alphabetical order
- To produce the trading profit and loss statement
In which column of the trial balance are debit balance values listed?
In which column of the trial balance are debit balance values listed?
- Assets column
- Liabilities column
- Credit column
- Debit column (correct)
According to Luca Pacioli, what technique is similar to a post-closing trial balance?
According to Luca Pacioli, what technique is similar to a post-closing trial balance?
- Balance sheet (correct)
- Profit and loss statement
- Income statement
- Cash flow statement
What does an unequal total of the debit and credit column in a trial balance indicate?
What does an unequal total of the debit and credit column in a trial balance indicate?
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Which historical work first described a process similar to a post-closing trial balance?
Which historical work first described a process similar to a post-closing trial balance?
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Study Notes
Trial Balance
- The purpose of a trial balance is to verify that the debit and credit balances of all general ledger accounts are equal.
Trial Balance Columns
- Debit balance values are listed in the left column of the trial balance.
Luca Pacioli's Technique
- Luca Pacioli's technique, similar to a post-closing trial balance, is the "proof of the ledger".
Unequal Totals in Trial Balance
- An unequal total of the debit and credit column in a trial balance indicates errors in recording, posting, or calculating balances.
Historical Work on Post-Closing Trial Balance
- The historical work "Summa de arithmetica, geometria, proportioni et proportionalità " by Luca Pacioli first described a process similar to a post-closing trial balance.
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