What does a trial balance primarily demonstrate?

• A. Assets equal liabilities
• B. Cash equals accounts receivable
• C. Debits equal credits
• D. Revenues equal expenses

Answer: (C)

The trial balance centers on the double-entry rule that every transaction has equal debits and credits, so listing all account balances and totaling their debit and credit sides should show a match. This demonstrates that the ledger is arithmetically in balance and ready for producing financial statements. It’s not about assets equaling liabilities—that’s the broader accounting equation, not a ledger balance check. It also doesn’t require cash to equal accounts receivable, since those are different asset accounts and can carry different amounts. Revenues and expenses live on the income statement, and their equality isn’t what the trial balance verifies. Remember, a balanced trial balance confirms arithmetic accuracy in the ledger, but it doesn’t guarantee that there are no other types of errors.