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    Question

    The purpose of trial balance is to know about

    the:
    A Financial performance of the company Correct Answer Incorrect Answer
    B Financial position of the company Correct Answer Incorrect Answer
    C Liquidity position of the company Correct Answer Incorrect Answer
    D Arithmetical accuracy of the accounts of the company Correct Answer Incorrect Answer
    E Both A & B Correct Answer Incorrect Answer

    Solution

    A trial balance is a bookkeeping or accounting report that lists the balances in each of the company's general ledger accounts. Since accounting is done on a double-entry system, the total of debit and credit balances should be equal. A disagreement in the trial balance indicates an error and therefore a trial balance helps in checking the arithmetic accuracy of preparation of accounts.

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