This presentation is useful to Second year D. Pharm Students for drug Store & Business Management subject and some also to Commerce

1. By,
Prof. P. B. Patil
H.R. Patel Institute of Pharmacy, Shirpur

2.  Before preparing the final account, it is necessary
to test the accuracy of the individual posting in the
ledger.
 Under the double entry book keeping system the
two aspect viz debit and credit of each transaction
must be recorded.
 An entry which is recorded on the debit site of one
account is also recorded on the credit side of some
other amount.
 Hence, the amount on the debit side must be equal
to the amount on the credit side

3.  Trial Balance is a statement prepared to check
the arithmetical accuracy of the book keeping
entries up to the date stated at the head of the
trial balance.
 Trial balance ensure that both the aspect of
each transaction have been duly recorded.

4.  To ascertain the arithmetical accuracy of the
ledger account
 To help in locating errors
 To help in preparation of final account

5.  To ascertain the arithmetical accuracy of the
ledger account:
- As has been stated earlier, if the sum of the
debit and credit columns of the trial balance
tally.
- Individual ledger accounts are also accurate
since the following errors in the ledger account
are not reveled by the trial balance:

6. -- Posting of transaction in in wrong column.
-- Posting of correct amount but to wrong
account.
-- Wrong entry in the ledger.
-- Omission of an entry in the ledger.
Such errors can be avoided only by exercising
due to care and caution while recording of
transaction.

7.  To help in locating errors:
When there are a large no. of posting in ledger
and the trial balance dies not tally the following
steps are required:
- To recheck the tally of debits and credits
- To recheck of the trial balance item with the
ledger
- Rechecking the total of ledger accounts and
their balancing
- Find out the difference may be due to omission
of an entry ether an debit and credit side

8.  To helps in the preparation of final account:
- The trial balance contain the list of all ledger
accounts with their debit and credit balance.
- So while preparing the financial statement
(Final Account) there is no need to refer to the
ledger.
- Financial statement can be easily prepared
from a tallied trial balance.
- Trading account, Profit and loss account can
also be prepared form revenue and expense
account appearing in the trial balance.

9.  Preparation of Trial Balance:
Trial Balance is prepared by one of the following
one method
- Balance Method
- Total Amount Method

10.  Balance Method:
- In this method all the ledger accounts are
first balanced. This is done immediately
after posting of original entry to the ledger.
- The debit and credit sides of each ledger
account is totaled.
- The balance are then recoded on the credit
or debit side of the trial balance.

11. - If the grant total of debit and credit balances
tally.
- The trial balance is prepared on a loose
sheet having three columns.
- The first column gives the name of account
and the second and third column shows the
amount of debit and credit balances
respectively.
Particulars
Balance
Dr. Cr.

12.  Total Amount Method:
- In this method the total on debit side of every
ledger account is entered under the debit
column of the trial balance and the total on
the credit side of each ledger account is
recorded under the credit column of the trial
balance.
- A grant total of both debit and credit side is
then taken.
- In case the grant totals on both sides tall, it
indicates arithmetical accuracy.

13.  Accounting Errors:
Following types errors are reflect on the Trial
Balance:
- Errors of Commission
- Errors of Omission
- Errors of Principle
- Errors of Posting
- Compensating Errors

14. Thank You…..!!!