The Trial Balance Flashcards
What is a Trial Balance?
List of every balance in the general ledger on a specific day – Internal documents
What is general ledger?
Record of past transactions
What is the Trial balance used for?
Check the accuracy of the general ledger
What should be the heading of a Trial balance?
The Business name “as at” last day of the month
What should equal?
Column 2 = Column 3
What is a statement of Financial Position?
An official statement that is a list of assets, capitals and liabilities, which does not include expenses nor income
What is a non-current asset?
An economic resource that will bring benefit to the business for more than one year
What is a current asset?
An economic resource that will bring benefit to the business for less than one year
Examples of non-current asset?
- Land, Buildings, vehicles, Machinery
Examples of current asset?
- Inventory, receivables and bank
What is the difference between noncurrent and current liabilities?
An obligation to transfer an economic resource to someone, either for more or less than a year
Why is non-current and current so important?
- Tells how much money a business owes soon
- Do they have the ability to do so
- What assets they own can be turned to cash
- Are they close to bankruptcy
Statement of Financial
Position?
- total value of assets that
provide security - total value of assets that
can be quickly turned into
cash - amount of owner funds
- total long term obligations
- total current obligations
