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Questions and Answers
Which of the following best describes a trial balance?
Which of the following best describes a trial balance?
- A list of all the general ledger accounts in a business (correct)
- A list of all the debit balances in a business
- A list of all the capital accounts in a business
- A list of all the revenue accounts in a business
What is the purpose of a trial balance?
What is the purpose of a trial balance?
- To calculate the trading profit and loss statement
- To prove the accuracy of the ledger accounts (correct)
- To determine the liquidity of a business
- To produce the balance sheet
Where are the debit balance values listed in a trial balance?
Where are the debit balance values listed in a trial balance?
- In the capital column
- In the revenue column
- In the credit column
- In the debit column (correct)
Where are the credit balance values listed in a trial balance?
Where are the credit balance values listed in a trial balance?
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Who first described the process of a trial balance?
Who first described the process of a trial balance?
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Study Notes
Trial Balance Overview
- A trial balance is a list of all general ledger accounts and their corresponding debit or credit balances at a specific point in time.
Purpose of a Trial Balance
- The purpose of a trial balance is to verify that the debit and credit balances of all general ledger accounts are equal, thus ensuring the mathematical accuracy of the accounting equation.
Debit and Credit Balances in a Trial Balance
- Debit balance values are listed in the left column of a trial balance.
- Credit balance values are listed in the right column of a trial balance.
Origin of the Trial Balance Process
- Luca Pacioli, an Italian monk, first described the process of a trial balance in the 15th century.
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Description
Test your knowledge of trial balances with this quiz! Learn about the purpose of a trial balance, how it is prepared, and the significance of debit and credit balances. Perfect for accounting and finance enthusiasts.
