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What is the importance of the trial balance in the preparation of a financial statement?
Wiki User
∙ 14y ago
The trial balance is the source document for the preparation of any financial statements.
A trial balance is a list of all the account codes with the current balances and the first step to prroduction of the financial statements is checking to see if it balances. If it doesn't then you're in serious trouble as there is a major flaw in your financial records.
When constructing the profit and loss account in the financial statements you simply group together the income and expense accounts from the trial balance into convenient groupings and the resulting total is the profit or loss of the business.
The balance sheet is contructed by simply taking all the balance sheet accounts from the financial statements, again grouping together into convenient groupings. The profit or loss calculated in the profit and loss earlier is the retained profit for the period that is entered at the bottom of the balance sheet to ensure it balances
Wiki User
∙ 14y ago
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Is the Bank Reconciliation statement a part of financial statement?
Bank reconciliation statement is not part of financial statement it is the helping statement to tally bank account with balance in banks statement.
What do you mean by funds flow analysis.explain the mechanism involved in preparation of funds flow statement?
It is the statement of change in financial position, prepared to determine only source and uses of working capital between date of to balance sheet.
What financial statement reports an organization's financial position at a point in time?
Balance Sheet
What are financial reports that summarize the financial condition and operations of a business?
Financial statements are financial reports which summarize the financial condition and operations of a business. Included in a financial statement are a balance sheet, income statement, and also a cash flow statement.
What financial statement does a accounts receivable belong?
Balance Sheet
What is the difference between final account and financial statement?
Financial Statement: Financial statement is a instrument used to present a companies financial position. Financial statement complies with balance sheet, cash flow and funds flow statements. Final accounts is the final stage of preparation of financial statement
Is a balance sheet the same as a financial statement?
Balance sheet is a type of financial statement. Other types of financial statements could be income statement and statement of cash flow.
What is a financial statement that includes assets and liabilities?
A Balance Sheet, also sometimes referred to as a Statement of Financial Position.
Is a cashflow statement an obligatory financial statement?
Yes Cash flow statement is an obligatory financial statement alongwith income statement and balance sheet.
On which financial statement will income summary be shown a statemenet of owners equity b balance sheet c income statement d no financial statement?
D. No financial statement. Income summary is only used at the end of the period and is the account with no balance.
Difference between fund flow statement and balance sheet?
Difference between fund flow statement and balance sheet?Funds flow statement and balance sheet both are the statements of different nature. Funds flow statement is a statement summarizing the significant financial changes which occurred between the beginning and the end of a company's accounting period while balance sheet is a statement of assets and liabilities at a particular point of time. Here are some of the important differences between the two:Funds flow statement include only those items which causes changes in working capital while balance sheet includes the assets and liabilities of the company and shows total resources of the company.Funds flow statement can be used for decision making purpose while balance sheet is used for examining the financial soundness of the company.Funds flow statement is prepared for the use of internal management and hence its preparation is not mandatory, while balance sheet is for the use of external parties like creditors, shareholders, government and hence its preparation is mandatory for the company.Funds flow statement is prepared after preparation of balance sheet and for a relatively short period of time as compare to balance sheet."Hence it can be said that funds flow statement is not a substitute of balance sheet but it is a supplementary statement and hence they should both be used together in order to reach at right conclusion regarding the financial position of the company"
What do you mean by funds flow analysis.explain the mechanism involved in preparation of funds flow statement?
It is the statement of change in financial position, prepared to determine only source and uses of working capital between date of to balance sheet.
Is the Bank Reconciliation statement a part of financial statement?
Bank reconciliation statement is not part of financial statement it is the helping statement to tally bank account with balance in banks statement.
What are the two major financial statement?
They are the Income Statement also known as Profit and Loss and the other one is the Statement of Financial Position also known as Balance Sheet.
What financial statement lists a company's assets liabilities and owner's equity as of a specific date is called?
A Balance Sheet, also sometimes referred to as a Statement of Financial Position.
What financial statement reports an organization's financial position at a point in time?
Balance Sheet
Which financial statement can be compared with a still photograph?
cash flow statement
