TRIAL BALANCE & RECTIFICATION OF ERRORS

Meaning of Trial Balance: When posting of all the transactions into the Ledger is
completed and accounts are balanced off, then the balance of each account is put on a list called
Trial Balance.
Definition: Trial Balance is the list of debit and credit balances taken out from ledger. “It also
includes the balances of Cash and bank taken from the Cash Book”.
Preparation : Steps (Balance Method)
1. Ledger A/c’s which shows a debit balance is put on the Debit side of the trial balance.
2. The A/c Showing credit balance is put on the Credit side of Trial Balance.
3. Accounts which show no balance i.e. whose Debit and Credit totals are equal are not entered
in Trial Balance.
4. Then the two sides of the Trial Balance are totalled. If they are equal it is assumed that there
is no arithmetical error in the posting and balancing of Ledger A/c’s.
Objectives or Functions of Trial Balance:
 It helps in ascertaining the arithmetic accuracy of ledger accounts.
 Helps in locating errors.
 Provides the summary of Ledger A/c’s.
 Helps in the preparation of Final A/c’s

TRIAL BALANCE as at _______

Account Title Debit Credit Balance
Balance
• Capital xxxx
• Land and Buildings xxxx
• Plant and Machinery xxxx
• Equipment xxxx
• Furniture and Fixtures xxxx
• Cash in Hand xxxx
• Cash at Bank xxxx
• Debtors xxxx
• Bills Receivable xxxx
• Stock of Raw Materials xxxx
• Stock of Finished Goods xxxx
• Purchases xxxx
• Carriage Inwards xxxx
• Carriage Outwards xxxx
• Sales xxxx
• Sales Return xxxx
• Purchases Return xxxx
• Interest Paid xxxx
• Commission/Discount Received xxxx
• Salaries xxxx
• Long Term Loan xxxx
• Bills Payable xxxx
• Creditors xxxx xxxx
• Advances from Customers
• Drawings
Q1 Prepare the trial balance from the following information

PARTICULARS L.F Dr. Cr.

Sundry Debtors 4,10,000
Sundry Creditors 80.000
Rent &Taxes 48,000
Purchase 34,00,000
Sales 56,00,000
Trade Expenses 12,000
Return Inwards 1,20,000
Return Outwards 80,000
Expenses 4,000
Motor Vehicles 6,50,000
Electricity 25,000
Opening Stock(1/4/2019) 2,30,000
Premises 12,00,000
Fixtures& Fittings 3,10,000
Bad Debts Written Off 8,000
Loan From Gopal 1,50,000
Interest On Gopal’s Loan 15,000
Drawing 40,000
Cash in Hand 75,000
Rent Received 30,000
Capital 6,07,000
TOTAL 65,47,000 65,47,000

Q2 Prepare the trial balance from the following information-:

Sno. NAME OF ACCOUNTS AMOUNT
(I) Capital 2,00,000
(II) Cash 1,80,000
(III) Creditors 1,00,000
(IV) Sales 3,00,000
(V) Stock 70,000
(VI) Debtors 5,000
(VII) Bank Loan 12,00,000
(VIII) Purchases 50,00,000

Q3 .Prepare the TRIAL BALANCE from the given information.

.
S.no NAME OF THE ACCOUNT AMOUNT
 1 Cash 2,00,000
2 Purchases 1,200
3 Sales 20,000
4 Purchase Return 5,000
5 Sales Return 6,00,000
6 Transportation 80,000
7 Discount Allowed 1,00,00
8 Printing 9,000
9 Sundry Debtors 1,800
10 Sundry Creditors 700
11 Investments 60,000
12 Plant and Machinery 4,00
13 Building 800
14 Furniture 3,100
15 Electricity 1,00,000
16 Postage 50,000
17 Drawings 2,000
18 Salary 10,000
19 Travelling Expenses 500
20 Bank Loan 1,000

MCQ
1) Agreement of trial balance is affected by:
(a) One sided errors only. (b) Two sided errors only.
(c) Both (a) and (b). (d) None of the above

2) If the trial balance agrees, it implies that:

(a) There is no error in the books. (b) There may be two sided errors in the book.
(c) There may be one sided error in the books. (d) There may be both two sided and one
sided errors in the books.
3)Trial balance is:
(a) An account. (b) A statement.
(c) A subsidiary book. (d) A principal book

4) A Trial balance is prepared:

(a)After preparation of financial statements
(b)After recording transaction in subsidiary books
(c) After posting in ledger
(d) After posting to ledger is complete and accounts have been balanced.

5)Assets are shown in the trial balance on the

(a) Debit Side (b)Credit Side
(c)Neither debit nor credit (d)Outside the trial balance

6)Most commonly method of preparing trial balance is

(a) Balance method
(b)Totals method
(c)Total-cum- method
(d)None
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