A Trial Balance That Is "In Balance" Proves

question 74

Multiple Choice

A trial balance that is "in balance" proves:

• A) the equality of the debits and credits
• B) all journal entries were properly posted to the ledger
• C) all transactions were properly recorded during the accounting period
• D) none of the above

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a company.

Current Assets

Assets on a balance sheet that are expected to be converted into cash, sold, or consumed within a year.

Current Liabilities

Financial obligations a company must pay within a year, such as loans, accounts payable, and other debts.

Working Capital Ratio

A financial metric that measures a company's efficiency and its short-term financial health by comparing current assets to current liabilities.