SAP Business One Certification Practice Exam

What does the Trial Balance report primarily summarize?

1. Transactions made during the year

2. All liabilities of the company

3. All income and expenses

4. All accounts in the general ledger

The correct answer is: All accounts in the general ledger

The Trial Balance report primarily summarizes all accounts in the general ledger. This report is a key financial document that presents a list of all account balances at a specific point in time, including both debit and credit balances. It serves to ensure that the total debits equal total credits, which is a fundamental principle of double-entry bookkeeping. The Trial Balance is not limited to just transactions made during the year, which would be captured in other reports like the income statement or various transaction journals. It includes all types of accounts, such as assets, liabilities, equity, revenues, and expenses, providing a complete overview of the company's financial position at that moment. In summary, the core purpose of the Trial Balance report is to check the mathematical accuracy of the accounting records and give a summary of all accounts, confirming that the books are balanced before proceeding to further financial reporting.