Which one of the following statement is not true?

The correct answer is The object of trial balance is to test the accuracy of the books.

Important PointsOption 1 - The object of trial balance is to test the accuracy of the books.

The goal of creating a trial balance is to verify that all debits and credits have been correctly recorded in the ledger and that all accounts have been balanced. It is a list of the accounts and their balances that serves as a summary of the ledger.

Thus, the primary objective of trial balance is to test accuracy of Ledger accounts not the books(includes profit & loss accounts And balance Sheets).That why this statement is not true.

Option 2 - Trial balance provides basis for preparation of final accounts.

The first stage in creating financial statements is having a tallied trial balance available. The trade and profit and loss account receives a transfer of all revenue and expense accounts from the trial balance, and the balance sheet receives a transfer of all liabilities, capital, and asset accounts. Thus, Trial balance provides basis for preparation of final accounts is True. 

Option 3 - Errors of principles do not affect the agreement of the trial balance.

Error of Principles arising due to wrong classifications of receipts and payments between revenue and capital receipts and revenue and Capital expenditure. Error of Principles is not result from incorrect transaction recording thus doesn't effect trail balance. Hence, its true.

Option 4 - Compensatory errors are also known as equalising errors.

Two or more errors committed in such a way that they nullify the effect of each other on the debits and credits is known as Compensatory errors. In this error, the trial balance will always be tallied and does not have any difference that why Compensatory errors are also known as equalising errors. Hence, it is true.