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Trial Balance, Rectification of Errors and Adjusting & Closing Entries
What is a Trial Balance?
A Trial Balance is a statement prepared at the end of an accounting period listing all ledger account balances to verify that total debits equal total credits, confirming arithmetical accuracy of the books.
What is the formula to check if a Trial Balance agrees?
Total of debit balances must equal total of credit balances.
What is the primary purpose of preparing a Trial Balance?
The primary purpose is to verify the arithmetical accuracy of ledger postings; if total debits equal total credits, it indicates that double-entry bookkeeping has been correctly applied.
Which type of error is caused by posting to the wrong side of an account?
Error of commission involving wrong side posting.
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