What Limitations Does It Have Over Formal Financial Statements?


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The trial balance does not prove that the company has recorded all transactions or that the ledger is correct. A Trial balance is only a worksheet or a statement of ledger capable of having errors. A formal financial  statement should be accurate  right to the point and easy to read.In order for companies to prepare and issue financial statements, their accounting equations (debits and credits) must be in balance at year-end.

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