Financial statements of a manufacturing business

A trail balance is usually compiled on a monthly basis by most businesses.  The purpose of this is to ensure that the total debits of all transactions are equal to the total credits of the same transaction. If the trail balance does not balance, all the accounting entries for the month may have to be checked in order to find the error or errors. A manufacturing business purchases raw material and then converts it, via its manufacturing process, into finished goods.  These goods are then usually sold to trading businesses as merchandise for resale to the consumer.  Sometimes consumers may purchase directly from a manufacturer, as would be the case when a specific order is negotiated to manufacture a product to the customer’s specifications

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