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Question
Which statement best describes the purpose of preparing a trial balance?
Options
To classify all transactions into personal, real, and nominal accounts.
To identify arithmetical errors in ledger accounts.
To replace the preparation of final accounts.
To summarise cash transactions for the period.
MCQ
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Solution
To identify arithmetical errors in ledger accounts.
Explanation:
The main purpose of preparing a trial balance is to check the accuracy of ledger postings by ensuring that total debits equal total credits.
If they do not match, it indicates that there may be arithmetical or posting errors in the ledger accounts.
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