Which of the following statements is correct about Trial Balance?
AThe Trial Balance is prepared after preparing the Profit and Loss Account
BThe Trial Balance shows only nominal account balances
CThe Trial Balance has no statutory importance from the point of view of law
DThe Trial Balance shows only balances of Assets and Liabilities
Correct answer
C. The Trial Balance has no statutory importance from the point of view of law
Explanation
D. A Trial Balance is a summary of all General Ledger Balances outstanding as on a particular date. All the debit balances from the ledger are shown on one side and all the credit balances are shown on the other side. A Trial Balance is prepared before Final Accounts are prepared. From the point of view of law, a Trial Balance has no statutory importance.