part 2

Question 1

The Trial Balance

Answer 1

• List of accounts and their balances at a specific time
• Proves that debits equal credits after posting
• Uncovers errors in journalizing and posting

Question 2

To prepare a trial balance:

Answer 2

1. List accounts and their balances
2. Total the debit and credit columns
3. Ensure the two columns are equal

Question 3

Limitations of a Trial Balance

Answer 3

Does not prove:
That all transactions have been recorded, or that the ledger is correct
Numerous errors may exist even though
the trial balance columns agree
Total debits and total credits may be equal, but may still be posted to the wrong account or in the wrong amount