Asked by Sichen Zhang on May 27, 2024
Verified
Preparation of a trial balance is the first step in processing a financial transaction.
Trial Balance
An accounting report that lists the balances of all ledgers accounts in order to ensure that total debits equal total credits.
Financial Transaction
A financial transaction refers to an agreement, or communication between a buyer and seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.
- Understand the preparation and purpose of a trial balance in the accounting cycle.
Verified Answer
JM
Jasmyne McGeeJun 02, 2024
Final Answer :
False
Explanation :
The preparation of a trial balance comes after all financial transactions have been recorded and posted to the respective ledgers. The first step in processing a financial transaction is to analyze and record the transaction in a journal or subsidiary ledger.
Learning Objectives
- Understand the preparation and purpose of a trial balance in the accounting cycle.