Scribd Logo
Upload

Welcome to Scribd!

  • Form One Notes

    Uploaded by

    Salim Abdulrahim Bafadhil
    2K views2 pages
    The document discusses the trial balance, which is a statement that lists debit and credit balances of accounts extracted from ledgers. At the end of an accounting period, the totals on both sides must be equal to check the arithmetic accuracy of double-entry bookkeeping. A trial balance helps detect errors, ensure proper balance calculation, and prepare financial statements, though it cannot prove all transactions were recorded or prevent repeated postings. The document outlines how accounts are classified in the debit or credit column when preparing a trial balance based on balance type or total, and provides an example trial balance format.

    Original Description:

    Original Title

    FORM ONE NOTES

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses the trial balance, which is a statement that lists debit and credit balances of accounts extracted from ledgers. At the end of an accounting period, the totals on both sides must be equal to check the arithmetic accuracy of double-entry bookkeeping. A trial balance helps detect errors, ensure proper balance calculation, and prepare financial statements, though it cannot prove all transactions were recorded or prevent repeated postings. The document outlines how accounts are classified in the debit or credit column when preparing a trial balance based on balance type or total, and provides an example trial balance format.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    2K views2 pages

    Form One Notes

    Uploaded by

    Salim Abdulrahim Bafadhil
    The document discusses the trial balance, which is a statement that lists debit and credit balances of accounts extracted from ledgers. At the end of an accounting period, the totals on both sides must be equal to check the arithmetic accuracy of double-entry bookkeeping. A trial balance helps detect errors, ensure proper balance calculation, and prepare financial statements, though it cannot prove all transactions were recorded or prevent repeated postings. The document outlines how accounts are classified in the debit or credit column when preparing a trial balance based on balance type or total, and provides an example trial balance format.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    TRIAL BALANCE

    Definition; trial balance is a statement which show the list of debit and credit balance of
    accounts extracted from the ledgers.
    Normally the statement prepared at the end of accounting period, the total must be equal
    both sides.
    NEED FOR A TRIAL BALANCE
    The aim of the trial balance is to check the arithmetical accuracy of double entry of the
    business transactions in a given period.
    ADVANTAGES OF A TRIAL BALANCE
    1. It helps to check the arithmetical accuracy of double entry.
    2. It helps to get summary for the preparation of financial statement.
    3. Agreement of trial balance total proves that a balance of each ledger account has
    been calculated correctly, otherwise the trial balance could not agree.
    4. It helps to detect some book keeping errors.
    DISADVANTAGES OF TRIAL BALANCE
    1. Some errors cannot be detected by trial balance.
    2. It does not prove that all transactions have been recorded.
    3. It cannot protect the repeated postings.
    PREPARATION OF A TRIAL BALANCE
    (a) By means of balances
    We look for the balance b/d shown on which side of the account;
     If balance b/d shown on the debit side that account recorded on the debit
    column of the t/balance.
     If balance b/d shown on the credit side that account recorded on the credit
    column of the t/balance.

    (b) By means of total


    Key points used in preparation of a trial balance;
    (i) All assets (both non current and current assets) are recorded on the debit
    column. Eg: furniture, premises, motor vehicle, cash, bank, debtors, stock etc.
    (ii) All expenses are recorded on the debit column. Eg purchases, wages, drawings
    etc
    (iii) Capital s recorded on the credit column.
    (iv) All incomes are recorded on the credit column. Eg; sales, discount received etc
    (v) All liabilities (non current and current liabilities) are recorded on the credit
    column, eg; loan from bank, creditors, bank over draft etc
    (vi) Closing stock is not recorded in the trial balance.
    FORMAT OF A TRIAL BALANCE
    PROPRIATOR’S NAME
    TRIAL BALANCE AS AT --------------
    NAME OF ACCOUNT DEBIT CREDIT
    Capital XXX
    Drawings XXX
    Furniture XXX
    Machinery XXX
    Motor vehicles XXX
    Land XXX
    Building XXX
    Bank loan XXX
    Creditors XXX
    Bank XXX
    Cash XXX
    Debtors XXX
    Rent XXX
    Rates XXX
    Wages XXX
    Salaries XXX
    Electricity XXX
    Sales XXX
    Purchases XXX
    Return in ward XXX
    Return outwards XXX
    Carriage in wards XXX
    Carriage out wards XXX
    Rent received XXX
    Interest XXX
    Discount allowed XXX
    Discount received XXX
    Opening stock XXX
    TOTAL XXXXX XXXXX
    Closing stock XXX
    (a) By means of balances
    Example; please refer;
    FUNDAMENTAL OF BOOK KEEPING, FORM ONE, PAGE 95 Example 1.

    Prepared by;
    Md. Mzumila, Z.

    You might also like