What does it mean to “tick and tie” the financial statements?
This is slang phrase that relates to performing the financial statement tie-out. Basically, someone on the audit team would agree or “tie” each number in the financial statements back to the audit workpapers.
The company would use trial balance detail to prepare their financial statements, and the audit team would use trial balance detail to create their lead schedules, to the audit team would typically reconcile the financial statements back to lead schedules.
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What is the financial statement tie-out?
The financial statement tie-out is a slang phrase used by audit teams to refer to the process of agreeing every single number in the company’s financial statements (10-K,10-Q, or annual report) back to the audit workpapers. For example, if revenue in the financial statements was $95, the audit team would make sure the revenue number […]
What is a trial balance?
A trial balance summarizes a company’s transactions from the general ledger. A trial balance includes all of the balance sheet and income statement accounts. The trial balance will list out all of the accounts in the chart of accounts with the associated debit or credit balance. The trial balance can be prepared at the end […]
What is the difference between the general ledger and a trial balance?
Transactions (sales, expenses, etc.) are recorded in the general ledger to specific accounts. In bookkeeping systems, the accountant can then run a trial balance report, and it will summarize all of the activity (debits and credits) to each trial balance account. It’s important that the trial balance sums to zero! The trial balance can then […]