The Purpose of a Trial Balance Is To

question 105

Multiple Choice

The purpose of a trial balance is to:

• A)Affirm whether the figures in the account ledgers are correct and balanced.
• B)Prepare a mock up of a real balance sheet.
• C)Review the income statement accounts.
• D)Meet a reporting requirement of the Securities and Exchange Commission SEC).

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Definitions:

Income from Operations

The profit realized from a business's core operations, excluding income from other sources and expenses unrelated to the core operations.

Non-Operating Activities

Non-operating activities involve transactions not related to the core business operations, such as investment income or losses and extraordinary items.

Asset Disposals

The process of removing a fixed asset from the financial statements due to sale, trade, or retirement, involving the calculation of any gain or loss.

Interest

A charge for borrowed money, generally a percentage of the borrowed amount.