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The purpose of a trial balance is to:

1. Prepare a practice balance sheet.
2. Group starts.
a. True.
b. False.

1 Answer

4 votes

Final answer:

The purpose of a trial balance is to verify that the total debits equal the total credits in the ledger accounts and to detect any mathematical errors in the double-entry accounting system. It is a key step in preparing financial statements.

Step-by-step explanation:

The purpose of a trial balance is neither to prepare a practice balance sheet nor to group stars. Rather, the trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal. A trial balance is used to ensure that the debits equal the credits following the double-entry bookkeeping system. It is typically prepared at the end of an accounting period to assist in the drafting of financial statements. Furthermore, a trial balance is used to detect any mathematical errors that might have occurred in the double-entry accounting system.

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