The Primary Purpose of the Trial Balance Is to Test

question 34

Multiple Choice

The primary purpose of the trial balance is to test the

• A) recording of transactions.
• B) analysis of transactions.
• C) equality of debit and credit balances in the ledger.
• D) equality of debit and credit entries in the journal.

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Definitions:

Face Value

The face value or amount in dollars indicated on a financial security, such as a bond or note, which is the total that will be paid out when it matures.

Yield to Maturity

The expected overall yield of a bond, assuming it is retained until its maturity date, comprising of both interest earnings and profits from capital appreciation.

Coupon Rate

Yearly interest percentage on a bond, calculated against its nominal value.

At Par

Refers to a financial instrument (e.g., bond or stock) being traded at its face value.