Question

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates:

Select one:

a. no errors can be discovered.

b. that all accounts reflect correct balances.

c. the mathematical equality of the accounting equation.

d. no errors have been made.

Answer 1

Answer-- d. no errors have been made.

a. no errors can be discovered --This option is incorrect because errors can be discovered if both debit and credit sides of a transaction would be omitted, it will reflect the total of trial balance equal.

b. that all accounts reflect correct balances-  This option is incorrect because there might incorrect debit entry being offset by an equal credit entry.

c. the mathematical equality of the accounting equation-- This option is incorrect because if the sum of both sides in trial balance match, it indicates that there is no mathematical errors in the ledgers. There can be errors in a company's accounting system or in the mathematical equality of the accounting equation.

d. no errors have been made-- This option is correct because If they do not tally, it means there are some errors or differnces which are investigated and rectified. Trial Balance is prepared at the end of the financial year which consists of two colums i.e. debit and credit. Balance of all ledger accounts are posted into the Trial Balance. It is prepared to ascertain the arithmetical accuracy of Books of Accounts and ensures that all balances are accurately extracted from ledger accounts. If the sum of the debit column equals the sum of the credit column in a trial balance, it shows that all entries have been entered and no errors have been made.