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Here are some points which explain the purpose of preparation of trial balance:
1. Instituting the arithmetical accuracy: When the sum of debit balance accounts equals to sum of credit balance accounts, it is presumed that posting from journal to the particular accounts is arithmetically correct.
2. Summarising the ledger accounts: It acts as a consolidated statement, providing a complete list of all the accounts. In this way, a Trial Balance provides a summarised version of each account.
3. Preparation of final accounts− The Trial Balance acts as a summarised version of each account, so different accounts can be directly transferred to Balance Sheet, Trading, and Profit and Loss Account without actually referring to different ledgers.
4. Identifying and rectifying errors: If the Trial Balance is not in agreement, the indications are of the occurrence of arithmetical error, which can be easily determined. Trial balance is only restricted to determine arithmetical errors.