Posted by: slang in k. Trial Balance
As earlier explained, first the recording of all the individual business transactions into the journal and then post into ledgers accounts vide the chart of accounts. The final output is then the trial balance which is explained in details:-
| Definition Or What is A Trial Balance |
- A list/statement/worksheet of all the account balances of the general ledger at a particular point in time from which the Income Statement and Balance Sheet of a business is drawn up.
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- It is prepared in each financial period as a summary of the closing of the previous ledger which proves the arithmetic accuracy of the ledger entry.
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- In bookkeeping, this is a useful tool for checking the accounting entries prior to doing the period-end processing.
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- Trial Balance reflects all the activity for an account or accounts within a selected date range. It shows the balance of the account at the beginning of the date range, the activity within the date range, and the balance at the end of the date range.
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| Illustration: |
Append below is the following balances extracted from the books of A Ltd on 31 December 2006
| |
Credit |
|
Debit |
| Bank overdraft |
7,000 |
Fixtures |
31,500 |
| Capital (01/01/06) |
90,000 |
Motor Vehicles |
20,800 |
| Creditors |
15,200 |
Debtors |
24,000 |
| Profit for the year |
58,800 |
Cash |
500 |
| Loan |
35,000 |
|
|
| |
|
|
|
The accumulated depreciation figures were: Motor vehicle $ 6,100
Fixtures $12,200
Question:
Complete the trial balance of A Ltdas at 31/12/2006.
Solution:
Trial Balance Of A Ltd As At 31 December 2006
| |
Debit
|
Credit |
| Premises |
120,000
|
|
| Creditors |
|
15,200
|
|
Fixtures
|
31,500
|
|
| Overdraft |
|
7000
|
| Motor Vehicles |
20,800
|
|
| Capital |
|
90,000
|
| Motor Vehicles - depreciation |
|
6,100
|
| Stock |
2,700
|
|
| Prepayments |
750
|
|
| Accruals |
|
250
|
| Loan |
|
3,500
|
| Fixtures-depreciation |
|
12,200
|
| Profit & Loss Account |
|
58,800
|
| Total ( DEBIT = CREDIT) |
224,550
|
224,550
|
|
| |
| |
This entry was posted on Thursday, October 18th, 2007 at 3:20 am and is filed under k. Trial Balance.
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October 18th, 2007 at 9:25 am
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