Which accounting standard requires the preparation of a trial balance?
Practice Questions
1 question
Q1
Which accounting standard requires the preparation of a trial balance?
IFRS
GAAP
Both IFRS and GAAP
Neither IFRS nor GAAP
Both IFRS and GAAP require the preparation of a trial balance as part of the accounting process to ensure accuracy in financial reporting.
Questions & Step-by-step Solutions
1 item
Q
Q: Which accounting standard requires the preparation of a trial balance?
Solution: Both IFRS and GAAP require the preparation of a trial balance as part of the accounting process to ensure accuracy in financial reporting.
Steps: 4
Step 1: Understand what a trial balance is. A trial balance is a list of all the accounts in the accounting system and their balances.
Step 2: Learn about accounting standards. IFRS (International Financial Reporting Standards) and GAAP (Generally Accepted Accounting Principles) are two main sets of accounting rules.
Step 3: Know that both IFRS and GAAP require businesses to prepare a trial balance. This is to check that the total debits equal the total credits.
Step 4: Recognize that preparing a trial balance helps ensure accuracy in financial reporting, which is important for stakeholders.
