Accounting · Trial Balance and Rectification of Errors

Consider the following statements regarding accounting principles and rectification of errors: Statement 1: A Trial Balance is a mandatory part of the financial statements that must be published by banks in their annual reports according to the Banking Regulation Act, 1949. Statement 2: Rectification of errors after the preparation of final accounts is performed by passing entries through the Profit and Loss Adjustment Account to avoid distorting current year profits. Statement 3: Adjusting entries are primarily concerned with cash transactions that were missed during the accounting period. Statement 4: Closing entries are passed to transfer the balances of real accounts like Land and Buildings to the Balance Sheet. Statement 5: An error of principle occurs when a transaction is recorded in the wrong book of original entry. Statement 6: If the debit side of the suspense account is greater than the credit side, the net balance is shown as an asset in the balance sheet until rectified. Statement 7: Compensating errors do not affect the agreement of the trial balance. Which of the following summaries is the most accurate?