Learning Outcomes - Verification of Accounting Records
The trial balance
Students will be able to:
- understand that a trial balance is a statement of ledger balances on a particular date
- outline the uses and limitations of a trial balance
- prepare a trial balance from a given list of balances and amend a trial balance which contains errors
- identify and explain those errors which do not affect the trial balance – commission, compensating,complete reversal, omission, original entry, principle.
Correction of errors
Students will be able to:
- correct errors by means of journal entries
- correct errors by means of suspense accounts
- adjust the profit or loss for an accounting period after the correction of errors
- understand the effect of correction of errors on a balance sheet.
Bank reconciliation
Students will be able to:
- understand the use and purpose of a bank statement
- update the cash book for bank charges, bank interest paid and received, correction of errors, credit transfers, direct debits, dividends, and standing orders
- understand the purpose of, and prepare, a bank reconciliation statement to include bank errors, uncredited deposits and unpresented cheques.
Control accounts
Students will be able to:
- understand the purposes of purchases ledger and sales ledger control accounts
- identify the books of prime (original) entry as sources of information for the control account entries
- prepare purchases ledger and sales ledger control accounts to include credit purchases and sales,
- receipts and payments, cash discounts, returns, bad debts, dishonoured cheques, interest on overdue accounts, contra entries, refunds, opening and closing balances (debit and credit within each account).