What is a trial balance?

What is a trial balance?

• A. A statement that lists company’s accounts with ending balances.
• B. A list of assets and liabilities only.
• C. A summary of cash flows for the period.
• D. A schedule of budgets for the next year.

Answer: (A)

A trial balance is a listing of all general ledger accounts and their balances at a specific date, used to verify that total debits equal total credits. It includes every type of account—assets, liabilities, equity, revenues, and expenses—showing the ending balances that have been posted. This isn't limited to assets and liabilities, and it's not a cash flow summary or a budget plan for the future. The trial balance helps ensure the books are in balance before preparing financial statements and can help detect posting errors. The option that describes a statement listing a company’s accounts with ending balances matches this concept, making it the best choice. The other options describe cash flow summaries, budgets, or partial account lists, which do not capture the full scope of a trial balance.

A trial balance is a listing of all general ledger accounts and their balances at a specific date, used to verify that total debits equal total credits. It includes every type of account—assets, liabilities, equity, revenues, and expenses—showing the ending balances that have been posted. This isn't limited to assets and liabilities, and it's not a cash flow summary or a budget plan for the future. The trial balance helps ensure the books are in balance before preparing financial statements and can help detect posting errors. The option that describes a statement listing a company’s accounts with ending balances matches this concept, making it the best choice. The other options describe cash flow summaries, budgets, or partial account lists, which do not capture the full scope of a trial balance.