WAEC Book Keeping 2024 Theory — Question 1

Model answer

(a) Limitations of trial balance: (i) It does not detect all errors in balances -- a trial balance only records balances from various ledgers; any error committed will not be detected by the trial balance. (ii) It is not suitable for small businesses, since some small businesses may not maintain a full set of ledgers to draw a trial balance from. (b) Uses of a ledger: (i) It is used to record transactions in double entry format. (ii) It can serve as a reference point. (iii) It can be used to correct errors on the accounts.