A trial balance ensures that the total debits equal total credits, indicating that the accounts are balanced.
What does a trial balance ensure?
Practice Questions
Q1
What does a trial balance ensure?
That all accounts are balanced
That all transactions are recorded
That the financial statements are accurate
That the company is profitable
Questions & Step-by-Step Solutions
What does a trial balance ensure?
Step 1: Understand that in accounting, every transaction affects at least two accounts.
Step 2: Know that one account will be debited and another will be credited.
Step 3: Remember that debits and credits must always balance out.
Step 4: A trial balance is a list of all accounts with their balances at a specific time.
Step 5: The trial balance adds up all the debit balances and all the credit balances.
Step 6: If the total debits equal the total credits, it means the accounts are balanced.
Trial Balance – A financial statement that lists all the balances of the general ledger accounts to ensure that total debits equal total credits.
Double-Entry Accounting – The accounting principle that requires every financial transaction to be recorded in at least two accounts, maintaining the balance of debits and credits.
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