The trial balance is useful in preparing the statement of financial position as it lists all the balances of the general ledger accounts, helping to ensure that total debits equal total credits. However, it does not prove net income or uncover all errors.

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The Trial Balance

Question 59

Multiple Choice

The trial balance

A) Proves that debits are greater than credits when the company has net income.
B) Uncovers any errors in journalizing and posting prior to preparation of the statement of financial position.
C) Is useful in preparing the statement of financial position.
D) All of the choices are correct.

Correct Answer: