Trial balance
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Trial balance

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Trial balance Trial balance Presentation Transcript

  • Trial Balance
  • Meaning
    • It is a statement containing various ledger balances on a particular date.
  • Objectives
    • To check arithmetical accuracy.
    • To facilitate preparation of financial statements.
    • To detect errors & to rectify the same.
  • Limitations
    • Not a conclusive proof of accuracy of books of accounts.
    • Final accounts may not represent true picture when trial balance is not correct.
  • Methods of preparing trial balance
    • Totals method- totals of debit & credit side are shown, which must be equal. Unpopular method.
    • Balance method- the debit & credit balances are shown in the respective accounts. Most common method.
  • Format Trial Balance (as on …………) Credit (in Rs.) Debit (in Rs.) Particulars S. No.
  • Redraft the Trial Balance Q. 90,000 10,000 10,000 5,000 1410 15,000 450 1,00,000 1000 500 Capital Net profit Drawings Bank Salaries Opening stock Reserve for bad debts Sales Outstanding expenses Prepaid insurance Amount( in Rs.) Particulars
    • Foll. Information was ascertained
    • The bank balance was bank overdraft.
    • Salaries should have been 4110
    • Debtors include Rs. 2000 towards bad debts.
    • Cash balance of rs. 340 has been omitted.
    • Interest on capital rs. 4,500 not taken into account.
    85,000 500 1,500 50,000 20,000 15,000 Purchases Carriage inward Carriage outward Land & buildings Plant & machinery Debtors Amount( in Rs.) Particulars