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WAEC Financial Accounting 2010 Question 2

Question 2

Trial Balance

A trial balance is prepared to

  1. A.detect fraud
  2. B.ascertain losses in a trading period
  3. C.determine opening capital
  4. D.test arithmetical accuracy of ledger entries
Show the answer and explanation

Answer: D (test arithmetical accuracy of ledger entries)

Explanation

A trial balance checks that total debits equal total credits, i.e. the arithmetical accuracy of the ledger.