Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Trial Balance

Financial Accounting

2. Transaction Analysis

Trial Balance

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Multiple Choice

Which of the following is NOT a useful step in finding errors on the trial balance?

Comparing account balances with ledger accounts

Verifying that each transaction is posted to the correct account

Rechecking the addition of the trial balance columns

Ignoring differences if they are small

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Verified step by step guidance

Understand the purpose of a trial balance: A trial balance is prepared to ensure that the total debits equal the total credits in the accounting system. Errors can disrupt this balance, so identifying and correcting them is crucial.

Review the first option: 'Comparing account balances with ledger accounts.' This is a useful step because it ensures that the balances in the trial balance match the individual ledger accounts, helping to identify discrepancies.

Analyze the second option: 'Verifying that each transaction is posted to the correct account.' This is also a useful step because errors can occur if transactions are posted to incorrect accounts, leading to imbalances in the trial balance.

Evaluate the third option: 'Rechecking the addition of the trial balance columns.' This step is essential because mathematical errors in adding the debit and credit columns can cause the trial balance to be incorrect.

Consider the fourth option: 'Ignoring differences if they are small.' This is NOT a useful step because even small differences can indicate underlying errors that may affect the accuracy of financial statements. All discrepancies should be investigated and resolved.