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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 All of the above Correct Answer Incorrect Answer

    Solution

    A trial balance is a 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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