Explain in brief objectives of preparing Trial Balance. OR What are the rules of posting of journal entries into the Ledger? Explain in brief.

The preparation of trial balance has the following objectives: 1. Checking of the arithmetical accuracy of the accounting entries: Trial Balance enables one to establish whether the posting and other accounting processes have been carried out without committing arithmetical errors. In other words, the trial balance helps to establish the arithmetical accuracy of the books. 2. Basis for preparation of financial statements: Trial Balance forms the basis for preparing financial statements such as the Income Statement and the Balance Sheet. The Trial Balance represents all transactions relating to different accounts in a summarized form for a particular period. In case, the Trial Balance is not prepared, it will be almost impossible to prepare the financial statements to know the profit or loss made by the business during a particular period or its financial position on a particular date. 3. Summarized ledger: Trial Balance contains the ledger balances on a particular position of a particular account can be judged simply by looking at the Trial Balance. The ledger may be seen only when details regarding the accounts are required. OR / Alternative Solution: Rules regarding posting of entries in the ledger 1. Separate account is opened in ledger book for each account and entries from journal are posted to respective account accordingly. 2. It is a practice to use words ‘To’ and ‘By’ while posting transactions in the ledger. 3. The concerned account debited in the journal should also be debited in the ledger but reference should be of the respective credit account.