Question

What is the trial balance used for?

• A. It is financial statement
• B. It records the balance of balance sheet
• C. It does not contribute to the accounting cycle
• D. It records balance of accounts

Hint:

The trial balance is a tool for error detection, not a final financial report.

Answer 1

The Correct Option is D

Step 1:
The trial balance is a statement that lists the balances of all ledger accounts to ensure that the total debits equal the total credits.
Step 2:
It is used to verify the arithmetic accuracy of the books of accounts and is a preliminary step in preparing financial statements, but it is not a financial statement itself.
Step 3:
Therefore, the correct option is (D) as it records the balances of accounts for further financial reporting.