Fundamentals of

Accountancy, Business
and Management 1
Quarter 3 – Module 9:
Preparation of Trial Balance
Introductory Message

This Self-Learning Module (SLM) is prepared so that you, our dear learners,
can continue your studies and learn while at home. Activities, questions, directions,
exercises, and discussions are carefully stated for you to understand each lesson.

Each SLM is composed of different parts. Each part shall guide you step-by-
step as you discover and understand the lesson prepared for you.

Pre-tests are provided to measure your prior knowledge on lessons in each

SLM. This will tell you if you need to proceed on completing this module or if you
need to ask your facilitator or your teacher’s assistance for better understanding of
the lesson. At the end of each module, you need to answer the post-test to self-check
your learning. Answer keys are provided for each activity and test. We trust that you
will be honest in using these.

In addition to the material in the main text, Notes to the Teacher are also
provided to our facilitators and parents for strategies and reminders on how they can
best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on any part
of this SLM. Use a separate sheet of paper in answering the exercises and tests. And
read the instructions carefully before performing each task.

If you have any questions in using this SLM or any difficulty in answering the
tasks in this module, do not hesitate to consult your teacher or facilitator.

Thank you.

i
 What I Need to Know

This module was designed and written with you in mind. It is here to
teach you how to prepare the trial balance using the rules of debit and credit and to
make you realize the importance of it in ensuring mathematical accuracy in the
accounts (ABM_FABM11-Iva-d-32).

At the end of this module, you are expected to:

a. identify the information needed in the preparation of the
trial balance and
b. prepare the trial balance.

1
 What I Know

Directions: These are the accounts used by Kabarkada Services with their
corresponding account balances. Prepare the June 2020 trial balance of the
company. Write your answers on a separate sheet of paper.

Utilities Payable ₱ 1,400

Accounts Receivable 12,000
Kabarkada, Capital 250,000
Service Vehicle 420,000
Service Revenues 62,400
Prepaid Insurance 14,400
Notes Payable 205,600
Cash 22,200
Kabarkada, Withdrawals 14,000
Supplies 18,000
Salaries Expense 13,800
Prepaid Rent 8,000
Unearned Revenues 10,000
Accounts Payable 53,000
Office Equipment 60,000

2
 Lesson

1 Preparation of Trial Balance

After posting transactions in their corresponding ledger accounts, its debit

and credit balances must be reflected in a trial balance. The preparation of this
statement will serve as the basis for the final accounts of the business. This is
important because it can determine the accuracy of the accounts.

If both columns of the trial balance tally, we can reasonably assure that the
accounts are accurate. It does not mean that they are free of all errors, but it can at
least establish mathematical accuracy.

What’s In

Directions: As a review for our previous lesson, post each journal entry to their
corresponding ledger given the journal entries recorded. Write your
answers on a separate sheet of paper.

1. The owner invested P30,000.00 cash in the business.

GENERAL JOURNAL Page 1

Date Account Titles and Explanation P.R. Debit Credit

2019
Mar.1 Cash 101 P 30,000
Malinis, Capital 301 P 30,000
To record initial investment

Account Name: Account No.

Date Account Titles and J.R. Debit Credit Balance
Explanations

3
 Account Name: Account No.
Date Account Titles and J.R. Debit Credit Balance
Explanations

2. The business received P15,000 for services rendered.

GENERAL JOURNAL Page 2

Date Account Titles and Explanation P.R. Debit Credit

2019
Apr.14 Cash 101 P 15,000
Service Revenue 401 P 15,000
To record cash received for
services rendered

Account Name: Account No.

Date Account Titles and J.R. Debit Credit Balance
Explanations

Account Name: Account No.

Date Account Titles and J.R. Debit Credit Balance
Explanations

Notes to the Teacher/Facilitator

This module will help students prepare trial balance. They

will be able to identify the interrelation of journal entries and
posting in the preparation of the trial balance.

4
 What’s New

Directions: Identify the normal account balance of the following accounts. Write
your answers on a separate sheet of paper.

1. Salaries Expense

2. Cash

3. Supplies

4. Furniture

5. Accounts Payable

6. Makisig, Drawings

7. Building

8. Makisig, Capital

9. Professional Fees

10. Service Revenue

11. Accounts Receivable

12. Notes Payable

13. Land

14. Laundry Revenues

15. Unearned Service Revenues

5
 What Is It

After computing the balance of each ledger account, the next step is the
preparation of trial balance.

The trial balance is a list of all accounts with their respective debit and credit
balances. It shows the equality of the debits and credits at a given time. The accounts
are listed in the same manner they appear in the ledger. In the trial balance, they
will have either a debit or credit balance following their balances in the ledger. Those
accounts having zero balances are skipped. Look at the table below.

Example of a trial balance.

Makabayan Travel Agency

Unadjusted Trial Balance
December 31, 2018

Debit Credit
110 Cash P 126,000
120 Accounts Receivable 645,000

130 Prepaid Rent 360,000

140 Office Supplies 36,000

150 Furniture 2,175,000

155 Accumulated Depreciation P 435,000

210 Notes Payable 900,000

220 Accounts Payable 285,000

310 Makabayan, Capital 1,680,000

320 Makabayan, Withdrawals 1,200,000

410 Travel Revenues 5,133,000

510 Salaries Expense 3,771,000

560 Miscellaneous Expense 93,000

TOTAL P8,433,000 P8,433,000

6
 The following are the simple steps in preparing the trial balance:

1. Indicate in the heading (centered) the details of the trial balance

(name of the business, the term “Trial Balance”, and the date).

2. List the open accounts and their balances.

3. Total the debit and credit columns.

4. Double rule the total of the debit and credit columns. It means that
you must put two lines after the amounts have been equaled and
balanced.

For a deeper understanding of the lesson, look at the ledger accounts of

Pamilya Services as an example. Take note of the following:

• listings of accounts (same order as presented in the ledger accounts and

account chart)
• debit and credit amounts (taken from the account balances)

Account Name: Cash Account No. 101

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.1 Invested cash J-1 P 30,000 P 30,000
1 Obtained loan from RDS J-1 50,000 80,000
2 Purchased supplies J-1 P 10,000 70,000
3 Paid business permits J-1 2,000 68,000
10 Paid salary J-1 1,000 67,000
16 Collected fees J-2 8,000 75,000
17 Paidsalary J-2 1,000 74,000
24 Paid salary J-3 1,000 73,000
27 Withdrew cash J-3 500 72,500
28 Collected accounts J-3 2,000 74,500
29 Paid Rent J-3 10,000 64,500
31 Paid salary J-3 1,000 P 63,500

Account Name: Accounts Receivable Account No. 102

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.21 Rendered services J-3 P 2,000 P2,000
28 Collected accounts J-3 P 2,000 0

7
 Account Name: Supplies Account No. 103

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.2 Purchased supplies J-1 P 10,000 P 10,000

Account Name: Service Equipment Account No. 104

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.1 Invested equipment J-1 P 30,000 P 30,000

Account Name: Accounts Payable Account No. 201

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.30 Received electric bill J-3 P 2,500 P 2,500

Account Name: Loans Payable Account No. 202

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.1 Obtained loan from RDS J-1 P 50,000 P 50,000

Account Name: Pamilya, Capital Account No. 301

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.1 Invested cash J-1 P 60,000 P 60,000

Account Name: Pamilya, Drawings Account No. 302

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.27 Withdrew cash J-3 P 500 P 500

Account Name: Service Revenue Account No. 401

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.16 Rendered services J-2 P 8,000 P 8,000
21 Rendered services J-3 2,000 P 10,000

8
 Account Name: Taxes and Licenses Account No. 501

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.3 Paid business permits J-1 P 2,000 P 2,000

Account Name: Salaries Expense Account No. 502

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.10 Paid salary J-1 P 1,000 P 1,000
17 Paid salary J-2 1,000 P 2,000
24 Paid salary J-3 1,000 3,000
31 Paid salary J-3 1,000 P 4,000

Account Name: Utilities Expense Account No. 503

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.30 Paid electricity bill J-3 P 2,500 P 2,500

Account Name: Rent Expense Account No. 504

Date Account Titles and J.R. Debit Credit Balance

Explanations
2019
Jul.29 Paid rent J-3 P 10,000 P 10,000

This is how the trial balance of Pamilya Services will look like.
Pamilya Services
Trial Balance
July 31, 2019
Debit Credit
110 Cash P 63,500
130 Supplies 10,000
140 Service Equipment 30,000
201 Accounts Payable P 2,500
220 Loans Payable 50,000
310 Pamilya, Capital 60,000
320 Pamilya, Drawings 500
401 Service Revenue 10,000
501 Taxes and Licenses Expense 2,000
502 Salaries Expense 4,000
503 Utilities Expense 2,500
504 Rent Expense 10,000
TOTAL P 122,500 P 122,500

9
 • The account titles are arranged based on their order in the chart of accounts,
starting from the asset accounts to expense accounts.
• The total debit balance and credit balance are equal.
• Accounts Receivable was skipped because it has zero balance. The peso sign
shall only be seen on the first figure of debit and credit columns, and on the
total amounts.
• Take note that the debit and credit balances per account are in their normal
account balances.
• Total must be double ruled.

What’s More

Directions: Complete the table by identifying the normal balance of the given
accounts and prepare the trial balance of Matulungin Company for
August 2019. Write your answers on a separate answer sheet.

Account Amount Normal Account Balance

Matulungin, Capital P 3,000

Cash 4,200

Utilities Expense 800

Service Revenue 1,500

Accounts Payable 500

10
 What I Have Learned

Directions: Prepare the trial balance of Mabait Computer Repairs. The normal
account balance as of April 30, 2017 is given. Write your answers on a
separate sheet of paper.

501 Salaries Expense ₱4,000.0

101 Cash 181,000
102 Accounts Receivable 15,000
401 Service Revenue 25,000
301 Mabait, Capital 200,000
502 Supplies Expense 5,000
103 Equipment 25,000
201 Accounts Payable 5,000

What I Can Do

Directions: Prepare the trial balance of Juan Masipag Recruitment Agency.

The normal account balance as of December 31, 2019 is given. Write your
answers on a separate sheet of paper.

502 Supplies Expense ₱15,000

202 Notes Payable 135,000
102 Accounts Receivable 28,500
504 Utilities Expense 30,000
302 Masipag, Withdrawals 18,000
503 Rent Expense 15,000
103 Building 375,000
501 Salaries Expense 75,000
101 Cash 21,000
104 Land 87,000
401 Service Revenues 258,000
201 Accounts Payable 26,400
505 Insurance Expense 9,600
301 Masipag, Capital 254,700

11