2025 · Q81
Which one of the following statements is correct?
General Accounting Principles, Auditing and InsuranceTrial balance and errors
- AAgreement of trial balance is a conclusive proof of the accuracy.
- BAt the end of the accounting year, all the nominal accounts of the ledger book are balanced.
- CSuspense account opened in a trial balance is a permanent account.
- DA ledger is known as the principal book of accounts.
Explanation
The ledger is known as the principal (or main) book of accounts because all journal entries are ultimately posted into its accounts. The other statements are incorrect: agreement of the trial balance is not conclusive proof of accuracy (errors of principle, omission or commission may persist); a suspense account is temporary, opened only to force the trial balance to agree; and nominal accounts are closed by transfer to the Trading and Profit & Loss Account at year-end, not balanced.