Describe the purpose of a Trial Balance and the steps of how to prepare a Trial Balance.. 1 page response:
Part 1: Describe the purpose of a Trial Balance and the steps of how to prepare a Trial Balance.
Part 2: Meredith Ward is the assistant chief accountant at Frazier Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter. Meredith is hurriedly trying to prepare a trial balance so that quarterly financial statements can be prepared and released to management and the regulatory agencies. The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m. deadline, Meredith decides to force the debits and credits into balance by adding the amount of the difference to the Equipment account. She chooses Equipment because it is one of the larger account balances; percentage-wise, it will be the least misstated. Meredith “plugs” the difference! She believes that the difference will not affect anyone’s decisions. She wishes that she had another few days to find the error but realizes that the financial statements are already late.
Answer the following questions:
- Who are the stakeholders in this situation?
- What are the ethical issues involved in this case?
- What are Meredith’s alternatives?
Describe the purpose of a Trial Balance and the steps of how to prepare a Trial Balance.