Features and Objectives of Preparing Trial Balance

A trial balance can be defined as a statement of balances extracted from the various accounts in the ledger with a view to test the arithmetical accuracy of the books of account. It is has two sides debit and credit and they both should be equal.

Features of trial balance :

  1. Trial balance can be prepared anytime during the accounting period.
  2. It is prepared to check the arithmetical accuracy of posting of entries from journal to ledger, in other words it is an instrument for carrying out the job of checking and testing.
  3. It is not a part of the double entry system of book keeping but only for checking the accuracy of posting. However it does not reveal all errors.

Objectives of preparing trial balance:

  1. It ensures that all transactions have been recorded with the same debit and credit amounts
  2. It makes the preparation of trading, profit and loss account and balance sheet easy by making available the balances of all account at single place.
  3. By identifying errors in the books of accounts it helps in rectifying those errors before the preparation of the final accounts.
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