MGMT 1A Chapter Notes - Chapter 2.4: Trial Balance, Financial Statement
Document Summary
Debit balances appear in left column, credit balances in the right column. Under double-entry system, this equality occurs when the sum of the debit account. Proves the mathematical equality of debits & credits after posting balances equals the sum of the credit account balances. May also uncover errors in journalizing & posting. Useful in the preparation of financial statements. 1. list the account titles and their balances in the appropriate debit or credit column. 2. total the debit and credit columns. 3. prove the equality of the 2 columns. Trial balance does not guarantee freedom from recording errors (errors may exist even though the totals of the trial balance columns agree) Ex. the trial balance may balance even when: A correct journal entry is not posted. Incorrect accounts are used in journalizing or posting. Offsetting errors are made in recording the amount of a transaction.
