Trial Balance & Incomplete Records

Question 1

Purpose of Trial Balance

Answer 1

• To ensure double entries are correctly posted (Dr = Cr)
• Used as a starting point for preparing the financial statements

Question 2

Limitations of Trial Balance

Answer 2

• May not identify all errors in the general ledger
• A trial balance will not identify error corrections

Question 3

Techniques to derive missing financial statement figures or elements from the accounts

Answer 3

• Manipulation of the accounting equation
• Derive missing figures from ledger accounts
• Mark ups and margins cost structure