Question

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which of the following statements correctly explains how to prepare a trial balance? (check all that apply.)

• verify that the total debit balances equals the total credit balances.
• total debit account balances do not have to equal total credit account balances in order for the financial statements to be prepared.
• compute the total of debit balances and the total of credit balances.
• list each account title and its amount from the ledger.

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Explanation:

1. Preparing a trial balance first requires listing every account title and its corresponding balance from the general ledger.
2. The next step is to calculate the sum of all debit balances and the sum of all credit balances separately.
3. A key final step is verifying that the total debit balances equal total credit balances; this equality is a fundamental check before preparing financial statements, making the statement that debits do not need to equal credits incorrect.

Answer:

• Verify that the total debit balances equals the total credit balances.
• Compute the total of debit balances and the total of credit balances.
• List each account title and its amount from the ledger.