A trial balance shows the:

Question

BlackTom AI · Accepted Answer

Let’s break down what a trial balance is testing for in accounting terms. A trial balance lists all ledger accounts and their balances to verify that total debits equal total credits.
Option 1: 'Revenues and expenses' — These accounts appear in the income statement, and while their balances affect the overall equality of debits and credits, the trial balance itself is concerned with the arithmetic check of debits vs credits across all accounts, not specifically distinguishing revenues from expenses.
Option 2: 'Assets and Liabilities' — These are balance sheet accounts and their balances do appear in the trial balance, but the phrase 'A trial balance shows the' is asking for a concise description of what the balancing represents overall, not just which types of accounts appear. In short, this option describes components rather than the balancing concept itself.
Option 3: 'Profit and Loss' — Profit and loss is a result of revenues minus expenses and is reported on the income statement or in equity through the retained earnings. It is not what a trial balance explicitly demonstrates; the trial balance is about equal totals of debits and credits across all accounts rather than naming a single outcome like profit or loss.
Option 4: 'Debit and Credit in Balance' — This directly describes the core purpose of a trial balance: demonstrating that the sum of debits equals the sum of credits, i.e., that the accounts are in balance. This is a succinct characterization of the trial balance’s function.

VPAB13H3 F LEC01 Final Exam Quiz

A trial balance shows the:

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