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The most important reason for producing a trial balance prior to preparing the final accounts is:
A. it confirms the accuracy of the ledger
B. it provides all the figures necessary to prepare the final accounts
C. it shows that the ledger accounts contain debit and credit entries of an equal value
D. it enables the accountant to calculate any adjustment requiredThe answer is C
All the trial balance does is check that the debits equal the credits. There can still be plenty of mistakes (so not A); it does not provide all the figures – entries for this periods depreciation, for example, will still need making (so not B); the accountant needs other information to be able to make adjustments (so not D).
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