Question

Which of the following best describes what a trial balance checks?

Options

• Whether all transactions are recorded in the correct period

• Whether debits and credits are equal in the ledger balances

• Whether financial statements comply with accounting standards

• Whether the profit or loss is correctly calculated

Answer 1

Whether debits and credits are equal in the ledger balances

Explanation:

A trial balance lists all ledger balances to see if total debits equal total credits. This checks arithmetic accuracy, not the correctness of accounts or timing of entries.