Accounting Online Program Certification Practice Test 2025 - Free Certification Practice Questions and Study Guide

The primary purpose of a trial balance is to verify that debits equal credits. This is a crucial step in the accounting process because it helps ensure that the accounting records are mathematically correct. When transactions are recorded in double-entry accounting, each debit entry should have a corresponding credit entry. A trial balance lists all the account balances at a specific point in time, allowing the accountant to confirm that the total of all debit balances equals the total of all credit balances.

While preparing financial statements is an important function of the accounting process, the trial balance itself directly serves the purpose of verifying the accuracy of account balances before these statements are prepared. Similarly, while calculating profitability and analyzing cash flow are essential for assessing a company's financial health, these activities occur after the trial balance step, using the verified data from the trial balance as a foundation.