Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 4 - Accrual Accounting Concepts - Questions: 6

Answer

The financial information in a trial balance is not up-to-date and complete.

Work Step by Step

Following are the reasons:- i) some events are not recorded daily because it is not efficient to do so. For example, use of supplies or wages to employees etc. ii) some costs are not recorded during the accounting period, because these costs expire with the passage of time. iii) some items may be unrecorded. For example, utility bill or telephone bill that will be received in the next accounting period.
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