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Why is trial balance prepared ?

Why is trial balance prepared ?

by Asma Ul Husna Sornali -
Number of replies: 1

Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements. Ledger balances are segregated into debit balances and credit balances. Asset and expense accounts appear on the debit side of the trial balance whereas liabilities, capital and income accounts appear on the credit side. If all accounting entries are recorded correctly and all the ledger balances are accurately extracted, the total of all debit balances appearing in the trial balance must equal to the sum of all credit balances.

In reply to Asma Ul Husna Sornali

Re: Why is trial balance prepared ?

by Shahana Kabir -
Nice observations.Thanks for response.