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Why do you prepare a Trial Balance?
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Trial balance contains balances of all accounts that may
either be of capital nature or revenue nature and may
either having credit or debit balance. By which we can make
our financial statements by taking balances from trial
balance.
And as every transaction affects two accounts in double
entry system i.e. one is debit and other one is credit so
it reveals any arithmatical mistake in posting and
recording etc.
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Answer / genius
Accounting is based on Double entry system , As per rules of Double entry system “Every Debit has its corresponding Credit.” Hence, Trial Balance is prepared to check the arithmetical accuracy of account.
If Amount of Debit & Credit side of Trial Balance must tally or equal. THEN only we are allow to move the next step i.e. Preparation of Final Account.
If Trial Balance must not tally we have to check our record as well as Account to find out reason of this mistake.
Hence, It is necessary to prepare the Trial Balance.
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Answer / bashistha
for preparing profit & loss , Balance sheet its better to create trial balance first.
| Is This Answer Correct ? | 0 Yes | 1 No |
Answer / rupali
To find out net profit and prepared profit and loss account.
| Is This Answer Correct ? | 12 Yes | 18 No |
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