Acc 280 Week 2 Dq 3

Week 2 DQ 3

When is the trial balance prepared?

Trial balances are ledger statements of account balances. They are the last steps of the process. Prepare a trial balance on a sheet and any information provides a communicating financial position of companies to interested parties.

What does the trial balance tell you?

A trial balance lists the totals of the credit and debits entity of businesses for a given amount of time. A format of two columns ’scheduled’ listings, one for debts of the other for credit of incoming or outgoing actions of businesses. Preparation of a trial balance will aid in finding mathematical errors.

What does the trial balance not tell you?

A cataloged transaction or missing input within the computing would not always be revealed.

Why not use the trial balance to report financial information internally and externally?

Use of the trial balance for preparation of internal or external reports will not give the details of a typical financial statement. A company can use the accrual method, thus, create financial clarity and dexterity.

External cash flow statements like balance sheets indicate assets, debts, and equity. An income statement could indicate revenue and expenses, and a cash flow statement will provide date on cash flow operation, financing and investing actions. The equity statements report on retained earnings, common equity and any dividends payment.

The internal statements on performance are variety of reports like budgets reports, costs analysis, production statements and financial statement to determine business performance.

What limitations do trial balances have over formal financial statements?

Statements can be configured into a trial balance when one is wrong so is the other. A financial statement does not guarantee an error within configuration.

The difference is trial balances are listing of accounts in the order of receiving the sub- categories are different like operating expenses, or gross...