Question

Before transferring the balance from Opening Bal Equity, be sure to verify that

A. the value in Opening Bal Equity is not negative.
B. no extra accounts have been created.
C. the account balances match the Trial Balance.
D. all of the above.

Answer 1

Before transferring the balance from Opening Bal Equity, verify that the account balances match the Trial Balance, the Opening Bal Equity is not negative, and no extra accounts have been created; thus, the answer is D. all of the above.

Step-by-step explanation:

Before transferring the balance from Opening Bal Equity, be sure to verify that the account balances match the Trial Balance. Additionally, it is important to ensure that the value in Opening Bal Equity is not negative and that no extra accounts have been created. Therefore, the correct answer to the question is D. all of the above.

When preparing financial statements, it is crucial to check the accuracy of all entries. The Opening Bal Equity represents the residual equity from the previous period and should be correctly reported to maintain financial integrity. Moreover, all accounts should be reviewed to confirm that the balances align with the Trial Balance and no unauthorized or redundant accounts have been established. In terms of accounting principles, the opening balance equity is an indicative figure of the starting point of your accounts for the new financial period.