Which accounting standard requires the use of a trial balance?
Practice Questions
1 question
Q1
Which accounting standard requires the use of a trial balance?
IFRS
GAAP
Both IFRS and GAAP
None of the above
Both IFRS and GAAP do not specifically require a trial balance, but it is a common practice in preparing financial statements.
Questions & Step-by-step Solutions
1 item
Q
Q: Which accounting standard requires the use of a trial balance?
Solution: Both IFRS and GAAP do not specifically require a trial balance, but it is a common practice in preparing financial statements.
Steps: 5
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: Check if IFRS or GAAP requires a trial balance. Neither IFRS nor GAAP specifically states that a trial balance must be used.
Step 4: Recognize that using a trial balance is a common practice. Even though it's not required, many accountants use it to help prepare financial statements.
Step 5: Conclude that while a trial balance is not mandated by IFRS or GAAP, it is a helpful tool in the accounting process.
