When a trial balance is in balance,
A) adjusting entries are not required.
B) the general ledger is free of errors.
C) the debit account balances equal the credit account balances.
D) the company has earned a net income.

Question

Quizplus · Accepted Answer

A trial balance is a statement of all the accounts in a ledger with their debit or credit balances. The purpose of preparing a trial balance is to ensure that the total of debit balances equals the total of credit balances. If the trial balance is in balance, it means that the debit account balances equal the credit account balances. However, it does not necessarily mean that there are no errors in the general ledger or that adjusting entries are not required. Similarly, it does not indicate whether the company has earned a net income or not.

When a Trial Balance Is in Balance