L2 Trial Balance

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L2 Trial Balance

  1. 1. <ul><li>Objectives </li></ul><ul><li>Upon the completion of this topic the student will be able to know </li></ul><ul><li>Preparing Trial balance under Total Balances Method </li></ul>
  2. 2. Recap <ul><li>Trial balance is prepared: </li></ul><ul><li>To check the arithmetical accuracy </li></ul><ul><li>To know at a glance the balances of various accounts </li></ul><ul><li>To serve as the starting point for preparation of the final accounts </li></ul><ul><li>Helps the auditors in checking the accounts </li></ul>
  3. 3. Preparation of Trial balance under total balances method <ul><li>Under this method: </li></ul><ul><li>Debit as well as credit sides of all the ledger accounts will be totalled </li></ul><ul><li>These totals will be taken for preparing the Trial Balances </li></ul><ul><li>Debit totals figure on the debit column of Trial Balance </li></ul><ul><li>Credit totals figure on the credit column of the Trial balance </li></ul>
  4. 4. Proforma of Trial Balance Trial Balance as on _____________ Credit Rs. Debit Rs. LF Name of the Account Sl No
  5. 5. Exercise <ul><li>From the following Prepare Trial balance under Total Balances Method as on 31-3-1998 </li></ul><ul><li>Cash Dr. 22,550 Purchases Cr. 400 </li></ul><ul><li>Cash Cr. 11,580 Chaten A/c Dr. 1200 </li></ul><ul><li>Capital Cr. 20,000 Chetan A/c Cr. 1200 </li></ul><ul><li>Bank A/c Dr. 12,000 Discount Dr. 50 </li></ul><ul><li>Bank A/c Cr. 3,000 Discrount Cr. 20 </li></ul><ul><li>Sales A/c Cr. 3,000 Vinay A/c Dr. 1000 </li></ul><ul><li>Purchases Dr. 1200 Vinay A/c Cr 1000 </li></ul><ul><li>Drawings Dr. 800 Salaries Dr 2000 </li></ul><ul><li>Commission Cr. 600 </li></ul>
  6. 6. Solution: Trial Balance as on 31-3-1998 11,580 20,000 3,000 3,000 400 1,200 22,550 12,000 1,200 1,200 Cash A/c Capital A/c Bank A/c Sales A/c Purchases A/c Chetan’s A/c 1 2 3 4 5 6 Credit Rs. Debit Rs. LF Name of the Account Sl No
  7. 7. Solution (contd..) 20 1,000 --- --- 600 40,800 50 1,000 800 2,000 --- 40,800 Discount A/c Vinay A/c Drawings A/c Salaries A/c Commission A/c 7 8 9 10 11 Credit Rs. Debit Rs. LF Name of the Account Sl No
  8. 8. Summary <ul><li>In preparing trial balance under totals methods, debit and credit totals of each account is taken. </li></ul><ul><li>This method is out of use since it is not scientific . </li></ul>
  9. 9. <ul><li>Quiz </li></ul><ul><li>Trial Balance is a link between </li></ul><ul><li>a) Journal and ledger </li></ul><ul><li>b) Ledger and final accounts </li></ul><ul><li>c) None of the above </li></ul>
  10. 10. Frequently Asked Questions <ul><li>What is trial balance. </li></ul><ul><li>Write short notes on Different methods of preparing Trial Balance </li></ul><ul><li>List the aims or objectives of preparing trial balance </li></ul>

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