Accounting · Study Guide
Key Points
Trial balance proves that debits equal credits, but cannot identify all errors (e.g. compensating errors)
Suspense accounts isolate unidentified errors until they are traced and corrected
Bank and receivables reconciliations detect timing differences and errors before accounts are finalized
Exam Focus
Identify error types, correct them in ledger accounts or journals, and reconcile subsidiary records to control accounts. Show all workings.
Must-Know Terms
Cross-Theme Connections
The double entry model
Trial balance is the output of correct double entry recording
Accounting concepts used in the preparation of accounting records
Adjustments for accruals and prepayments follow the verification stage
Preparation of financial statements of sole traders
Verified and adjusted accounts are then used to prepare financial statements