Question

The starting point for testing the ending balance of financial instruments accounts is to obtain a gain or loss schedule for the year.

true
false

Answer 1

The starting point for testing the ending balance of financial instrument accounts is not to obtain a gain or loss schedule for the year, but to reconcile and verify the transactions recorded throughout the year against the actual balances of the financial instruments.

Step-by-step explanation:

The starting point for testing the ending balance of financial instrument accounts is NOT to obtain a gain or loss schedule for the year.

Instead, the starting point is to reconcile and verify the transactions recorded throughout the year against the actual balances of the financial instruments. This involves comparing the recorded transactions with supporting documentation, such as bank statements, invoices, and receipts, to ensure accuracy and identify any discrepancies.

By conducting this process of reconciliation, the ending balance of financial instrument accounts can be determined with accuracy and confidence.