Merits of trial balance
1. It helping in finding out the arithmetical accuracy of the accounts in the ledger.
2. Trading, profit and loss account and balance sheet are prepared on the basis of trial balance.
3.it will help in detecting the errors in the books of accounts and in their rectification.
4. Trial balance enables us to know balance of all accounts in one place.
Demerits of Trial balance
1. Trial balance tallied even though errors are existing in the books of accounts.
2. It is only possible to prepare trial balance of an organization, if the double entry system is followed, which is costly and time consuming.
3. Even if some transactions are omitted the trial balance tallies
4. Trial balance us not prepared in a systematic method the final accounts prepared. On the basis of trial balance do not depict the actual financial position of the concern.
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