Trial Balance

TRAIL BALANCE
A trial balance is a list of the balances on the accounts in the ledger at a certain date. A trial balance is
prepared to check the arithmetical accuracy of the double entry bookkeeping. The name of each
account is listed in the trial balance. The balance of each account is shown according to whether it is a
debit balance or a credit balance.
Format of trial balance
Details (Name of Folio Debit Credit

Accounts)
Steps of preparing trial balance
1. Prepare journal entries for the business transactions

2. Post journal entries into ledger and calculate closing balances of each ledger.
3. Prepare trial balance
The purpose of a trial balance
1. The trial balance can help in locating arithmetical error. However, the balancing of the trial
balance is not proof that the entries in the ledger accounts are completely free from errors
2. A trial balance is useful in preparation of final accounts. (Trading and Profit and loss account)
Debit balances and Credit balances of accounts heads
Assets and Expenses always have debit balances and Liabilities and incomes always have credit balances.
Q – 1 Prepare a Trial Balance for Shining Brothers Pvt. Ltd. at March 31st, 2017?
Q -2 There are several Mistakes in the Umer & Brothers (Pvt.) Ltd. Trial Balance. You are requested to
identify Errors and make corrected Trial Balance?
Q – 1 Prepare Trial Balance as on 31.03.2012 from the following balances of Ms. Maliha Afzal:
Drawings $ 74,800 Purchases $ 295,700 Stock (1.04.2011) $ 30,000
Bills receivable $ 52,500 Capital $ 250,000 Furniture $ 33,000
Discount allowed $ 950 Sales $ 335,350 Rent $ 72,500
Freight $ 3,500 Printing charges $ 1,500 Sundry creditors 75,000
Insurance $ 2,700 Sundry expenses $ 21,000 Discount received $ 1,000
Bank loan $ 120,000 Stock (31.03.2012) $ 17,000 Income tax $ 9,500
Machinery $ 215,400 Bills payable $ 31,700
Q – 2 Prepare Trial Balance from the following balances of Mr. Akhtar as on 31.12.2016:
Capital Rs. 420,000 Cash in hand Rs. 25,000 Building Rs. 115,000
Cash at bank Rs. 84,700 Machinery Rs. 60,000 Bills payable Rs. 68,000
Motor van Rs. 11,000 Rent Rs. 48,000 Car Rs. 68,000
Opening stock Rs. 86,000 Commission Rs. 1,400 Taxes Rs. 2,600
Purchases Rs. 94,000 Bad debts Rs. 3,200 Sales Rs. 196,000
Insurance Rs. 2,400 General Expenses Rs. 800 Sundry debtors Rs. 16,200
Reserve for doubtful debts Rs. 7,300 Salaries Rs. 94,000
Closing Stock Rs. 12,000
Unearned Revenue Rs. 16,000 Interest received Rs. 5,000
Foli
Details o Debit Credit
Liability Bank Loan 14000
Assets Marketable securities 6500
Liability Bills payables 1000
Liability Unearned income 3500
Assets Sundry debtors 12000
Liability Outstanding salaries 2500
Asset Prepaid rent 2000
Expenses Insurance expenses 7300
Liability Owners investment 95000
Expenses Rent and Rates expenses 400
Acc depreciation equipment 14000
Assets Accrued Revenue 15000
Machinery 25000
Drawings 3500
Assets Equipments 40000
Expenses Maintenance expenses 5000
Miscellaneous expenses 4800
Liability Accrued expenses 1500
Expenses Depreciation - Equipment 2000
Assets Unexpired Insurance 8500
Liability Ventor's payables 500
132000 132000
1) Error of omission - A transaction omitted completely from the books results in there being neither a
debit nor credit entry for the transaction. This could happen if a transaction is not entered in a book of
prime entry.
2) Error of commission – A transaction is posted to the wrong account, but the account is of the same
class as the account to which the posting should have been made. Example the payment of the
telephone bill is posted in error to heating and lighting account. Both these accounts are expense
account.
3) Error of principle – A transaction is posted to a wrong account which is not the same type as the
correct account. Example: revenue expenditure is treated as capital expenditure. For example, payment
of petrol for a vehicle has been debited to motor vehicle running expense account.
4) Error of original entry - A wrong amount is entered in a book of prime entry for a transaction :
Example a sales invoice of $ 200 is entered in the sale journal as $ 20.
Q – 1 From the following trial balance extracted from the books of Paulo you are required to prepare the
trading and profit and loss account for the year ended 30 April 2021 and the balance sheet as at that
date.
Q – Prepare a trial balance from the following information.

Debit Credit
1 Capital 175000
2 Wages 15000
3 Loan 25000
4 Cash 10000
5 Investment 35000
6 Creditors 20000
7 Account Payable 15000
8 Bank Overdraft 5000
9 Purchase 125000
10 Discount Allowed 5000
11 Rent Received 10000
12 Loan Given 40000
13 Bank 40000
14 Commission Received 5000
15 Custom Duty 15000
16 Advertisement 10000
17 Closing Stock 20000
18 Wages 10000

Trial Balance

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Trial Balance

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TRAIL BALANCE

Format of trial balance

Details (Name of Folio Debit Credit

Steps of preparing trial balance

1. Prepare journal entries for the business transactions

The purpose of a trial balance

Debit balances and Credit balances of accounts heads

Q – Prepare a trial balance from the following information.

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