The document is a trial balance for an accounting firm that checks ledger entries balance. It lists account names and balances, with notes explaining that bank overdraft and owner's drawings have credit balances, while capital is the balancing figure. Errors like entering amounts to the wrong account or missing matching transactions will not be caught by a trial balance.

1. Trial Balance SG Accounting & Finance

2. Purpose of Trial Balance The basic purpose is to check that the ledger entries tally up and match. In other words that they balance.

3. £ 620 Repairs to buildings 26900 Premises 715 Postage & stationery 600 Owner’s drawings 2695 Creditors 4130 Debtors 110 Cash in hand 1367 Commission Income 11210 Purchases 16134 Sales 213 Heating 2416 Bank Overdraft

4. 620 Repairs to buildings Cr £ Dr £ 26900 715 600 4130 110 11210 213 21886 Capital 3 Premises Postage & stationery Owner’s drawings 2 2695 Creditors Debtors Cash in hand 1367 Commission Income Purchases 16134 Sales Heating 2416 Bank Overdraft 1

5. Notes 1 – Bank overdraft is a liability to the bank therefore a credit balance 2 – Owner’s drawings represents money withdrawn from the business by the owner 3 – Capital is the balancing figure

6. How to work out if balance is Dr or Cr Dr balances are either: Assets (premises, debtors, cash) Expenses (heating, lighting, purchases, repairs) Cr Balances are either: Liabilities (creditors) Income (sales, commission received)

7. Errors Some errors will not be highlighted by a trial balance: Entering the right amount to the right side but to the wrong account Entering two identical wrong amounts (one to Dr and one to Cr A missing transaction for both Dr and Cr