What does a trial balance verify when debits equal credits?

What does a trial balance verify when debits equal credits?

• A. Ledger postings are arithmetically balanced.
• B. All accounts are accurate.
• C. Financial statements are prepared.
• D. No adjusting entries are needed.

Answer: (A)

A trial balance checks that the general ledger is arithmetically balanced. After posting every journal entry, total debits should equal total credits because each transaction affects both sides. If the totals match, postings are mathematically correct overall. But a balanced trial balance doesn’t guarantee that each account is accurate, that every transaction has been recorded, or that financial statements are ready; errors like missing entries, posting to the wrong account on the same side, or offsetting mistakes can still occur. It’s a helpful check of math in the ledger, not a guarantee of overall accuracy.

A trial balance checks that the general ledger is arithmetically balanced. After posting every journal entry, total debits should equal total credits because each transaction affects both sides. If the totals match, postings are mathematically correct overall. But a balanced trial balance doesn’t guarantee that each account is accurate, that every transaction has been recorded, or that financial statements are ready; errors like missing entries, posting to the wrong account on the same side, or offsetting mistakes can still occur. It’s a helpful check of math in the ledger, not a guarantee of overall accuracy.