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Advantages of Trial Balance

How do I prep...

Question

How do I prepare a trial balance?

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Solution

One can prepare a trial balance by following the steps mentioned below:

Determine the balance of each accounting ledger.

Prepare a trial balance, and note the credit or debit balance.

Determine the total of the debit column.

Determine the total credit balance.

Ascertain that the debit and credit balances are equal.

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Q. Prepare a Trial Balance from the following items:


	₹			₹
Capital	24,000	Building		12,000
Opening Stock	8,500	Returns Inward		1,900
Furniture	2,600	Returns Outward		350
Purchases	8,950	Trade Expenses		1,000
Cash	7,300	Discount Received		970
Carriage	300	Salary		3,000
Sales	22,500	Office Rent		2,270

Q. Following Trial Balance is given but it is not correct. Prepare correct Trial Balance.


Debit Balances	Amount (₹)	Credit Balances		Amount (₹)
Building	3,00,000	Capital		3,68,000
Machinery	85,000	Furniture		28,000
Returns Outward	13,000	Sales		5,20,000
Bad Debts	14,000	Debtors		3,00,000
Cash	2,000	Interest Received		13,000
Discount Received	15,000
Bank Overdraft	50,000
Creditors	2,50,000
Purchases	5,00,000
	12,29,000			12,29,000

Q. Prepare correct Trial Balance from the following Trial Balance in which there are certain mistakes:


Heads of Accounts	Dr. (₹)	Cr. (₹)
Cost of Goods Sold	1,50,000	...
Closing Stock	...	40,000
Debtors	...	60,000
Creditors	...	30,000
Fixed Assets	50,000	...
Opening Stock	60,000	...
Expenses	...	20,000
Sales	...	2,00,000
Capital	90,000	...

Total	3,50,000	3,50,000

Q. Prepare a Trial Balance from the following balances taken as at 31st March 2017 :−

	(₹)		(₹)
Capital	2,50,000	Purchases	2,15,300
Drawings	24,000	Sales	3,80,000
Debtors	57,000	Miscellaneous Expenses	8,200
Creditors	28,500	Miscellaneous Receipts	3,600
Land & Building	1,80,000	Bad Debts	7,100
Plant	1,20,000	Bills Receivable	5,000
Stock on 1-4-2016	22,800	Loan from X	20,000
Factory Expenses	16,600	Interest on X's Loan	3,000
Office Expenses	7,700	Cash in hand	8,400
Purchases Return	6,000	Goodwill	10,000
Stationery	500
Freight	2,500

Q. Journalise the following transactions, post them into Ledger, balance the accounts and prepare a Trial Balance :−

2017		(₹)
March 1	Shyam Sunder & Sons commenced business with cash	80,000
2	Purchased goods for cash	36,000
3	Machinery purchased for cash	4,000
4	Purchased goods from :
	Raghu	22,000
	Dilip	30,000
6	Returned goods to Raghu	4,000
8	Paid to Raghu, in full settlement of his account	17,500
10	Sold goods to Mahesh Chand & Co. for ₹ 32,000 at 5% trade discount
13	Received cash from Mahesh Chand & Co.	19,800
	Discount allowed	200
15	Paid cash to Dilip	14,850
	Discount received	150
20	Sold goods for cash	25,000
24	Sold goods for cash to Sudhir Ltd.	18,000
25	Paid for Rent	1,500
26	Received for Commission	2,000
28	Withdrew by Proprietor for his personal use	5,000
28	Purchased a fan for Proprietor's house	1,200

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