Question

Which statement relating to a trial balance is incorrect? Select one: O a. The fact that the sum of the debit column equals the sum of the credit column does not guarantee that no errors have been made in the ledger. b. A trial balance is a list of all the accounts in the ledger with their current balances. O c. A trial balance reports the financial position of a business. O d. A trial balance may be prepared at any time to test the equality of debits and credits in the ledger.

Answer 1

Option C is incorrect

The Financial position of the business is reflected by the balance sheet of the organization not by the trial balance hence option C is incorrect.

Trial balance is a statement that contains the balances of all the ledger’s accounts.

Trial balance became a base for further accounting processes such as preparation of financial statements, balance sheet, etc.

Trial balance can be prepared at any time so as to check whether the debit balance of ledgers matched with the credit balance or not.

If the debit balance of the ledger accounts matches the credit balance, then it does not mean that there is no error in the ledger's account because the trial balance does not detect all the errors.

Trial balance help to disclose only one side error.

If two side error arises then it doesn’t reveal by the trial balance.

Errors which the trial balance doesn’t disclose are Compensatory Error, Error of complete omission, Errors of commission, etc.

Base on the above explanation Option A, Option B, Option D is correct.