Question

What is the function of a trial balance? Select one:
a. A trial balance has no function when a company uses the manual system.
b. A trial balance presents important graphs and notes to managers.
c. A trial balance shows all transactions in an account, which facilitates research.
d. A trial balance shows summarized balances by account, which facilitates analysis and financial statement compilation.

Answer 1

Answer:

d. A trial balance shows summarized balances by account, which facilitates analysis and financial statement compilation.

Explanation:

A trial balance shows balances of all ledger accounts in one place. These balances are used to enter data on the financial statements. Additionally, all ledger account balances in the trial balance makes preparation and analysis of financial statements easier. The debit side and the credit side must balance, however, it does not mean that it doesn't have any errors.