Trial Balance & Incomplete Records Flashcards
CHAPTER 10
1
Q
Purpose of Trial Balance
A
- To ensure double entries are correctly posted (Dr = Cr)
- Used as a starting point for preparing the financial statements
2
Q
Limitations of Trial Balance
A
- May not identify all errors in the general ledger
- A trial balance will not identify error corrections
3
Q
Techniques to derive missing financial statement figures or elements from the accounts
A
- Manipulation of the accounting equation
- Derive missing figures from ledger accounts
- Mark ups and margins cost structure
4
Q
Can trial balance acts as a check whether transactions have been posted at the correct amount ?
A
NO
Trial balance only checks Dr = Cr