1) What is the primary purpose of a trial balance? a) To verify the accuracy of financial statements b) To record business transactions c) To check that the sum of debits equals the sum of credits d) To prepare the income statement 2) Which of the following statements is true about a trial balance? a) A trial balance is only prepared at the end of the fiscal year. b) It is prepared to ensure that all debits and credits are equal. c) A trial balance is used to determine the net profit or loss. d) A trial balance is a financial statement that shows a company’s assets, liabilities, and equity. 3) If the trial balance does not balance, what should be the first step in identifying the error? a) Ignore the issue as it will not affect the financial statements. b) Recheck the balances of the ledger accounts for any arithmetic mistakes. c) Prepare a new trial balance and adjust the figures. d) Immediately prepare the income statement. 4) Which of the following errors will not be detected by a trial balance? a) A transaction recorded in the wrong account b) A mathematical error in the ledger entries c) A double posting of a transaction d) A transaction that was omitted completely 5) A company’s trial balance shows that the total debits and credits are equal, but you suspect an error in the accounts. Which of the following actions would be the most effective in ensuring the accuracy of the financial records? a) Preparing a new trial balance with different transaction data b) Reviewing the ledger accounts to check for misclassifications and errors c) Submitting the trial balance for final approval without further checks d) Relying on the trial balance since it is already balanced

TRIAL BALANCE

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