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

The main reason an accountant would conduct a trial balance is to:

Detect all types of errors in the accounting records

Calculate the net income for the period

Verify that total debits equal total credits in the ledger accounts

Prepare the financial statements for the period

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Verified step by step guidance

Understand the purpose of a trial balance: A trial balance is a tool used by accountants to ensure that the total debits equal the total credits in the ledger accounts. This helps verify the accuracy of the bookkeeping process.

Clarify the limitations of a trial balance: While it ensures that debits and credits are balanced, it does not detect all types of errors, such as errors of omission or incorrect account classification.

Recognize that calculating net income is not the purpose of a trial balance: Net income is determined through the preparation of the income statement, not the trial balance.

Understand the relationship between the trial balance and financial statements: The trial balance serves as a preliminary step to ensure the ledger accounts are balanced before preparing financial statements.

Conclude that the main reason for conducting a trial balance is to verify that total debits equal total credits in the ledger accounts, ensuring the accuracy of the accounting records.