The Main Reason an Accountant Would Conduct a Trial Balance

question 297

Multiple Choice

The main reason an accountant would conduct a trial balance is to

• A) determine whether account figures in the ledger are correct and balanced.
• B) obtain an estimate of the amount of taxes the firm owes.
• C) ensure the audit was done correctly.
• D) verify the validity of last year's balance sheet before beginning the next accounting cycle.

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Definitions:

Journal Entry

A record in accounting that notes every financial transaction in the books via debits and credits.

Balanced Entry

An accounting entry where the sum of debits equals the sum of credits, maintaining the balance of the accounting equation.

Owner's Capital

The amount of equity a business owner has invested in the firm plus any profits retained in the business.

Revenues

The income generated from normal business operations and other activities.