Learning Outcomes

After studying this Chapter, you shall be able to:

 Understand the meaning of Trial Balance
 Identify the objectives of preparation of Trial balance
 Know the limitations of Trial Balance
 Evaluate the various methods of preparation of Trial Balance

8.1 INTRODUCTION
In accounting, the first phase is to record the transactions followed by classification of such
recorded entries. In second phase of accounting, these are grouped into by preparation of
accounts in a book called as ledger. When the balancing of these ledger accounts is made,
we arrive at the net balance of all the ledger accounts. The dual aspect system shall always
prevail in whole accounting theory. Hence, the sum of these debit balances must be equal
to sum of all credit balances. In order to verify this, a schedule is prepared to assure the
arithmetical accuracy of the books of accounts. Such statement is called as Trial Balance. In
this chapter, the various aspects of trial balance have been discussed.

8.2 MEANING AND DEFINITION OF TRIAL BALANCE

A trial balance is a statement showing the balances of all the ledger accounts as at a
particular point of time. Usually trial balance is prepared at the end of the accounting
period, but it can be prepared at any point of time. It may be noted that computerized
accounting packages are capable of providing instant trial balance reports even on daily
basis.
According to Investopedia, “A trial balance is a bookkeeping worksheet in which the
balances of all ledgers are compiled into debit and credit account column totals that are
equal.”
According to Rolland, “The final list of balances, totaled and combined is called as Trial
Balance.”
According to Kohler’s dictionary of Accountants, “Trial Balance is defined as a list or
abstract of the balances or of total debits and total credits of the accounts in a ledger, the
purpose being to determine the equality of posted debits and credits and to establish a
basic summary for financial statements.”
According to Carter, “A trial balance is the list of debit and credit balances taken out from
the ledger. It also includes the balances of cash and bank taken from the cash book.”

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 2 Trial Balance

According to J. R. Batliboi, “A trial balance is statement, prepared with the debit and
credit balances of the ledger accounts to test the arithmetical accuracy of the books.”

8.3 FEATURES OF TRIAL BALANCE

The following are the basic features of trial balance:
(1) Statement only: The trial balance is a statement and not an account. In fact, it is a list of
balances of ledger accounts and cash book.
(2) Positional: The trial balance is prepared as on a particular date.
(3) All accounts: It shows the balances of all the ledger accounts including nominal accounts.
(4) Periodicity: Although, trial balance can be prepared at any moment but it is necessary to
prepare it at the end of the period when final accounts are to be prepared.
(5) Arithmetical accuracy: The totals of the two columns (Debit and Credit) should agree,
which indicates the reasonable accuracy especially arithmetical accuracy.
(6) Basis for Financial Statement: It is not a part of financial statements. But, it serves as a
basis for preparation of financial statements. It is a link between books of account and final
accounts.
(7) Not conclusive evidence: There are many errors that are not disclosed by the trial balance.
For example: error of complete omission, error of principle, etc. Therefore, the trial
balance is not a conclusive proof of accuracy of books of account.

8.4 OBJECTIVES OF TRIAL BALANCE

The trial balance is prepared to achieve the following objectives:
1. To establish Arithmetical Accuracy: The trial balance helps to establish arithmetical
accuracy of the recorded transactions.
2. Summary: The trial balance provides a ready reference summary of balances of all ledger
accounts.
3. Basis for Final Accounts: It provides basis for preparation of final accounts. If the balances
are taken from different folios of the ledger books, the work may be cumbersome. So, trial
balance facilitates the preparation of final accounts promptly.

8.5 LIMITATIONS OF TRIAL BALANCE

Generally trial balance is prepared to check the arithmetic accuracy of accounts. But the
agreement of both sides of trial balance is not a conclusive proof that all the ledger
accounts and cash book have been prepared correctly. In fact, there may be agreement of
trial balance, still some errors may remain. The basic limitation of trial balance is its failure
to detect the following types of errors:
1. Error of complete omission: when a transaction has not been entered at all in the journal.
For example: purchase of Rs. 5,000 not recorded in the purchases book.
2. Error of commission: when a transaction is entered in journal:
a.) With the wrong amount in both debit and credit sides. For example: purchase of
machinery Rs. 50,000 wrongly entered in cash book at Rs. 5,000.
b.) Through wrong accounts. For example: wages paid on installation of machinery is
debited to wages account instead of machinery account.
3. Errors at the time of posting: After recording, at the time of posting the entry into ledger:
Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 3 Trial Balance

a.) An entry has not at all been posted in the ledger.

b.) An entry is posted but twice in the ledger.

The above points reflect that even if the trial balance agrees, there may be some hidden
errors. But, the trial balance should still be prepared, especially at the end of the
accounting period; otherwise it would be very difficult to prepare the financial statements.

8.6 FORMAT OF TRIAL BALANCE

As already discussed in chapter 6, there may be two types of balances in respect of ledger
accounts namely debit balances and credit balancers. These balances are placed in the
debit column and credit columns in the format of Trial balance. Since, trial balance is a
statement showing balances of ledger accounts; it is always prepared as on a particular
date. Usually, five columns are prepared:
1. Serial Number
2. Ledger Account
3. Ledger Folio
4. Debit Amount (Total or Balance)
5. Credit Amount (Total or Balance)

TRIAL BALANCE (Abstract)

As at ………
S.No. Ledger Accounts L.F. Total of Debit Total of Credit
Side (Amount) Side (Amount)
1 Capital XXX
2 Drawings XXX
3 Opening Stock XXX
4 Purchases XXX
5 Wages XXX
6 Sales XXX
7 Building XXX
8 Debtors XXX
9 Creditors XXX
…. ………. ………. …….
…. ………. ………. …….
…. ………. ………. …….
TOTAL XXX XXX

It may be noted that the balances of all the ledger accounts are placed in trial balance
including that of Cash book. The folio number (L.F.) reflects the page number of the ledger
from which the corresponding balance has been taken.

Totaling of Trial Balance:

After having transferred the balances of all ledger accounts including cash and bank
balances, the two columns (Debit and credit) of trial balance are being totaled. These totals
should be equal to each other. If the trial balance does not agree and the errors could not
be traced timely, then the trial balance is tallied by transferring the difference of debit and
credit side to an account known as Suspense account.

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 4 Trial Balance

Did You Know HOW SUSPENSE ACCOUNT ORIGINATED IN BOOKS OF ACCOUNTS

When there is a mismatch in the trial balance totals, there is a need to scrutinize the
work already done. Usually it is done by the accountant himself. He may be able to
locate the problem if there are very few errors. But when a combination of errors have
been made, thorough scrutiny and detailed checking of the books of account are
required. If sufficient time is not available then the difference is transferred to the
suspense account. There may be any balance in suspense account. It is important to
note that suspense account is a temporary account which is opened just to proceed
further and to prepare financial statements timely. This suspense account is taken to
Balance Sheet.

8.7 RULES FOR PREPARING TRIAL BALANCE

For preparation of trial balance, a list of ledger accounts is taken along with their
corresponding balances. The following rules should be taken into care in this process:

1. DEBIT SIDE: The debit side of trial balance includes the balances of the following
accounts:
a) Asset
b) Expenses
c) Losses
d) Drawings
e) Cash and Bank Balance
f) Prepaid Expenses
g) Outstanding Incomes
2. CREDIT SIDE: The following accounts are placed to the Credit Column of the Trial
Balance:
a) Liabilities
b) Income
c) Revenue
d) Bank Overdraft
e) Outstanding Expenses
f) Income received in advance

Illustration 8.1
State whether the balances of the following accounts should be placed in the debit or credit
columns of the trial balance. Also give the logic behind it.
1. Building 6. Bad Debts 11. Interest Paid
2. Machinery 7. Discount Allowed 12. Loss of Stock
3. Rent 8. Cash in hand 13. Profit on sale of Asset
4. Creditors 9. Bills Receivable 14. Carriage Inwards
5. Sales 10. Bank Overdraft 15. Carriage Outwards

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 5 Trial Balance

Answer:
TRIAL BALANCE
As at XXXXXXXXXX
S.No. Ledger Accounts Logic Debit Balance Credit Balance
1. Building Asset
2. Machinery Asset
3. Rent Expense
4. Creditors Liability
5. Sales Income
6. Bad Debts Loss
7. Discount Allowed Expense
8. Cash in hand Asset
9. Bills Receivable Asset
10. Bank Overdraft Liability
11. Interest Paid Expense
12. Loss of Stock Loss
13. Profit on sale of Asset Income
14. Carriage Inwards Expense
15. Carriage Outwards Expense

8.8 METHODS OF PREPARING TRIAL BALANCE

There are three methods for preparing the trial balance viz., (i) Total Method (ii) Balance
Method and (iii) Total and Balance Method.

8.8.1 Total Method or Gross Trial Balance

Under this method, the ledger accounts are not balanced rather merely totaled. The total of
the debit side and credit side are called as debit total and credit total and are entered on
the debit and credit side of trial balance. There may be some accounts (Like Rent Account)
wherein total appears to one side only. In that case, the total is transferred to
corresponding one side only.
The basic advantage of this method is that it does not require balancing of accounts. But the
preparation of financial statements is not possible with this method. It is the main limitation
associated with this method.

The following Trial Balance has been prepared using Total Method.

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 6 Trial Balance

TRIAL BALANCE (Total Method)

As at ………[Using imaginary amounts]
S. Ledger Accounts L.F. Total of Debit Total of Credit
No. Side (Amount) Side (Amount)
1 Capital Account 1,000 36,000
2 Cash account 71,000 56,000
3 Sales Account 61,000
4 Sales Returns Account 200
5 Furniture Account 6,000
6 Computer Account 16,000
7 Debtors 60,000 50,200
8 Creditors 43,000 50,000
9 Purchases Account 52,000
10 Purchases returns Account 1,000
11 Salaries 5,000
TOTAL 2,54,200 2,54,200

8.8.2 Balance Method or Net Trial Balance

Under this method, all the ledger accounts are balanced. The balances may be either Debit
Balance or Credit Balance. This net balance is taken to trial balance. This is the most
commonly used method adopted by the accountants. It facilitates the easy preparation of
final accounts.
TRIAL BALANCE (Balance Method)
As at ………[Using imaginary amounts]
S. Ledger Accounts L.F. Debit Balance Credit Balance
No. (Amount) (Amount)
1 Capital Account 35,000
2 Cash account 15,000
3 Sales Account 61,000
4 Sales Returns Account 200
5 Furniture Account 6,000
6 Computer Account 16,000
7 Debtors 9,800
8 Creditors 7,000
9 Purchases Account 52,000
10 Purchases returns 1,000
Account
11 Salaries 5,000
TOTAL 1,04,000 1,04,000

8.8.3 Total and Balance Method or Compound Method

This method is basically the combination of above two methods. Under this method, totals
of both the sides of the accounts are taken in trial balance. Along with this, the net
balances are also computed and are written in separate columns. This Trial Balance contains
seven columns.
The following Trial Balance shows Compound Method.

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 7 Trial Balance

TRIAL BALANCE (Compound Method)

As at ………[Using imaginary amounts]
S. Ledger Accounts Totals Net Balances
No. Debit Credit Debit Credit
Side Side Balance Balance
(Amount) (Amount) (Amount) (Amount)
1 Capital Account 1,000 36,000 35,000
2 Cash account 71,000 56,000 15,000
3 Sales Account 61,000 61,000
4 Sales Returns A/c 200 200
5 Furniture Account 6,000 6,000
6 Computer Account 16,000 16,000
7 Debtors 60,000 50,200 9,800
8 Creditors 43,000 50,000 7,000
9 Purchases Account 52,000 52,000
10 Purchases returns A/c 1,000 1,000
11 Salaries 5,000 5,000
TOTAL 2,54,200 2,54,200 1,04,000 1,04,000

Did You Know Most popular method of preparing Trial Balance

As discussed above, there are three methods available for the preparation of trial
balance. But, the second method (Balance Method or Net Trial Balance) is most
popular method usually employed in practice. If nothing is given in examination
problem, then Balance method should be applied.

Illustration 8.2
Consider the following ledger balances appearing as at 31st March, 2019.
Ledger A/c Amount Ledger A/c Amount Ledger A/c Amount
Capital 79,000 Expenses 15,000 Discount Allowed 3,000
Sales Return 2,000 Debtors 75,000 Purchases Return 6,000
Sales 1,73,000 Creditors 35,000 Discount Allowed 1,000
Purchases 1,40,000 Insurance Paid 6,000 Interest Received 3,000
Cash in Hand 40,000 Investment 18,000 Commission Received 4,000
Prepare a Trial Balance as at 31-3-2015
Solution:
TRIAL BALANCE
As at 31-3-2019
S. Ledger Accounts L.F. Dr. (Amount) Cr. (Amount)
No.
1. Capital 79,000
2. Sales 1,73,000
3. Purchases 1,40,000
4. Purchases Return 6,000
5. Sales Return 2,000
6. Discount Allowed 3,000
7. Expenses 15,000
8. Debtors 75,000
9. Creditors 35,000

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 8 Trial Balance

10. Cash in Hand 40,000

11. Interest Received 3,000
12. Insurance Paid 6,000
13. Investment 18,000
14. Discount Allowed 1,000
15. Commission Received 4,000
TOTAL 3,00,000 2,99,000

Illustration 8.3
From the following ledger balances, you are required to prepare Trial Balance as on
31st March 2015.
Capital Rs. 4,00,000; Investment Rs. 1,00,000; Closing Stock Rs. 6,00,000; Interest
Received Rs. 50,000; Accrued Interest Rs. 20,000; Carriage Outwards Rs. 30,000;
Creditors Rs. 3,00,000; Salaries Rs. 1,20,000; Carriage Inwards Rs. 20,000; Debtors
Rs. 6,00,000; Sales Rs. 50,00,000; Purchases Rs. 40,00,000; Bills Payable Rs. 50,000;
Petty Cash Rs. 50,000; Discount Allowed Rs. 50,000;Building Rs. 4,00,000;
Outstanding Expenses Rs. 50,000; Prepaid Insurance Rs. 10,000; Depreciation Rs.
20,000; Cash at Bank Rs. 4,00,000; Loan Account (Credit) Rs. 3,30,000; Profit & Loss
Account Rs. 1,00,000; Bad Debt Recovered Rs. 10,000; Provision for Bad Debts Rs.
30,000, General Reserve Rs. 1,00,000

Solution:
TRIAL BALANCE
As at 31-3-2015
Ledger Accounts Dr. Ledger Accounts Cr.
(Amount) (Amount)
Cash at Bank 4,00,000 General Reserve 1,00,000
Petty Cash 50,000 Provision for Bad Debts 30,000
Depreciation 20,000 Bad Debt Recovered 10,000
Prepaid Insurance 10,000 Profit & Loss Account 1,00,000
Outstanding Expenses 50,000 Loan Account (Credit) 3,30,000
Building 4,00,000 Bills Payable 50,000
Discount Allowed 50,000 Sales 50,00,000
Purchases 40,00,000 Capital 4,00, 000
Debtors 6,00,000 Creditors 3,00,000
Carriage Inwards 20,000 Interest Received 50,000
Salaries 1,20,000
Investment 1,00,000
Closing Stock 6,00,000
Carriage Outwards 30,000
Accrued Interest 20,000
12,84,000 12,84,000

Illustration 8.4
From the following balances relating to Rahul Traders, prepare a trial balance as at 31st
March, 2019:

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 9 Trial Balance

Name of Ledger Account Amount (Rs.)

Cash account 50,500
Bank Account 42,000
Capital Account 2,00,000
Purchases account 3,00,000
Sales Account 5,31,000
Machinery account 68,000
Debtors 1,42,000
Creditors 29,000
Drawings 19,000
Rent 24,000
Salaries 42,000
Purchases Return 11,000
Sales Return 6,000
Freight 6,700
Advertisement 4,900
Prepaid Rent 3,400
Outstanding salaries 2,500
Carriage Inwards 1,000
Bad Debts 2,000
Furniture 32,000
Opening stock 12,000
Computers 18,000
Solution:
TRIAL BALANCE of Rahul Traders
As at 31-3-2019
Name of Ledger Account L.F. Dr. (Amount) Cr. (Amount)
Cash account 50,500
Bank Account 42,000
Capital Account 2,00,000
Purchases account 3,00,000
Sales Account 5,31,000
Machinery account 68,000
Debtors 1,42,000
Creditors 29,000
Drawings 19,000
Rent 24,000
Salaries 42,000
Purchases Return 11,000
Sales Return 6,000
Freight 6,700
Advertisement 4,900
Prepaid Rent 3,400

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 10 Trial Balance

Outstanding salaries 2,500

Carriage Inwards 1,000
Bad Debts 2,000
Furniture 32,000
Opening stock 12,000
Computers 18,000
TOTAL 7,73,500 7,73,500

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 11 Trial Balance

Illustration 8.5 [Preparation of corrected trial balance]

Mr. Mohit provides you the following trial balance prepared by his accountant. Since it does
not agree, the owner has appointed you to find out the mistakes and too prepare the
corrected trial balance. Give reasons for any shifting of item from one column to another.
TRIAL BALANCE
As at 31st March, 2019
Name of Ledger Account L.F. Dr. (Amount) Cr. (Amount)
Capital Account (Mohit) 2,15,000
Drawings 40,000
Leasehold Premises 2,60,000
Sales Account 1,92,000
Debtors 15,000
Purchases account 80,000
Purchases Return 1,000
Bank Loan 600
Bills Payable 12,000
Cash Balance 6,000
Opening Stock 11,000
Salaries 21,000
Discount Received 1,400
Sales Return 9,000
Creditors 20,000
TOTAL 3,66,400 5,17,600

Solution:
The following are the reasons of disagreement of trial balance:
(1) Cash Account: The cash balance is an asset, so its balance will be a debit balance.
(2) Purchases Return A/c: It always shows a credit balance, so it will appear under
credit column.
(3) Opening stock: The opening stock shall appear in debit column.
(4) Drawings A/c: It will appear in debit column.
(5) Salaries A/c: It is an expense and will appear in debit column.
(6) Discount Received: It will appear in credit column.

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 12 Trial Balance

TRIAL BALANCE (Corrected)

As at 31st March, 2019
Name of Ledger Account L.F. Dr. (Amount) Cr. (Amount)
Capital Account (Mohit) 2,15,000
Drawings 40,000
Leasehold Premises 2,60,000
Sales Account 1,92,000
Debtors 15,000
Purchases account 80,000
Purchases Return 1,000
Bank Loan 600
Bills Payable 12,000
Cash Balance 6,000
Opening Stock 11,000
Salaries 21,000
Discount Received 1,400
Sales Return 9,000
Creditors 20,000
TOTAL 4,42,000 4,42,000

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 13 Trial Balance

TEST YOUR KNOWLEDGE

Objective Type questions

State whether the following statements are True (T) of False (F).
(1) Trial Balance is always prepared for a period.
(2) Usually trial balance is prepared at the end of each year.
(3) Trial Balance shows the profit earned during the year.
(4) The agreement of trial balance is the conclusive proof of accuracy of transactions
recorded.
(5) Trial Balance may be disclosed in the trial balance.
(6) Purchases and drawings are disclosed to the credit side of trial balance.
(7) Assets and expenses appear to the debit side of the trial balance.
(8) Return inwards is shown under credit side of trial balance.
(9) In case of disagreement in trial balance, the difference is temporarily transferred to
suspense account.
(10) The suspense account is closed by transfer to profit and loss account..
[Answers: True:- 2,5,7,9 False:- 1,3,4,6,8,10]
Theoretical Questions
1. What is Trial Balance? State its objectives.
2. State the salient features of trial balance.
3. What are the various methods of preparing trial balance? Which method is most popular in
the industry?
4. “The agreement of trial balance is conclusive evidence about the accuracy of transactions
recorded in the books of account.” Comment.
5. What are the rules for preparing trial balance?

Practical Questions

Q.1 State whether the balances of the following accounts should be placed in the
debit or credit columns of the trial balance. Also give the logic behind it.
1. Plant 6. Carriage Inwards 11. Interest Received
2. Land 7. Discount Allowed 12. Abnormal Loss Account
3. Salary 8. Cash in hand 13. Bad Debts Recoverd
4. Debtor 9. Bills Payable 14. Loss on sale of machinery
5. Purchases 10. Bank Loan 15. Freight Outwards
[Answers: Debit Side:- 2,5,7,9 Credit Side:- 1,3,4,6,8,10]

Q.2 Indicate against each amount whether it is a debit or a credit balance. Also prepare a trial
balance as at March 31, 2019 based on the following balances:
Account title Amount (Rs.)
Capital 2,00,000
Drawings 32,000
Machinery 40,000
Sales 4,00,000
Purchases 4,20,000
Sales Return 40,000
Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 14 Trial Balance

Purchases Return 60,000

Wages 80,000
Goodwill 1,20,000
Interest Received 30,000
Discount Allowed 12,000
Bank Overdraft 44,000
Bank Loan 1,80,000
Debtors 1, 50,000
Creditors 1,20,000
Cash 1,08,000
Opening stock 32,000
[Ans.: Total of Trial Balance Rs. 10,34,000]

Q.3 Prepare the Trial Balance of Muskan as on 31st March, 2019. The balancing figure
represents capital.
Amount (Rs.) Amount (Rs.)
Debtors 6,10,500 Wages 1,15,000
Sales 12,15,000 Purchases 7,40,000
Cash 15,000 Sales Return 21,500
Bank Overdraft 85,000 Opening stock 45,000
Equipment 95,000 Purchases Returns 21,000
Capital ? Creditors 2,18,000
[Ans.: Total of Trial Balance Rs. 16,42,000; Capital Rs. 1,03,000]

Q.4 [Comprehensive] Journalise the following transactions, post them into ledger.
Also prepare Trial Balance.
Jan. 2019 (Rs.)
1 Suresh commenced business with cash 2,00,000
2 Purchase of goods for cash 40,000
7 Paid sundry expenses in cash 3,000
12 Goods purchased on credit from Sapna 15,000
14 Bought goods on credit from Rani 10,000
15 Paid trade expenses 4,000
16 Sold goods for cash 9,500
18 Paid wages 3,750
20 Sold good on credit to Ram 18,000
21 Sold goods for cash 21,500
22 Paid to Sapna in full settlement (Rs. 300 discount received) 14,700
23 Paid to Rani in full settlement, Discount received Rs. 200 9,800
24 Received cash from Ram 17,450
Discount Allowed 550
28 Salaries paid in cash 18,000
[Ans.: Total of Trial Balance Rs. 2,49,500]

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 15 Trial Balance

Q.5 [Preparation of corrected Trial Balance] The accountant of Anil prepared the
following Trial Balance. Inspite of agreement there are errors in it. You are
required to draw the correct Trial Balance stating the reasons for the changes
made:
TRIAL BALANCE
As at 31st March, 2019
Debit balances Rs. Credit Balance Rs.
Bank 3,37,500 Debtors 1,12,500
Discount Allowed 15,000 Sales 10,50,000
Rent received 22,500 Trade expenses 45,000
Creditors 2,10,000 Machinery 1,35,000
Carriage Inwards 45,000 Insurance Claim received 30,000
Purchases 7,50,000 Building 1,50,000
Bills Payable 1,50,000 Carriage Outwards 37,500
Opening Stock 2,56,500 Returns Inward 22,500
Salaries 90,000 Capital 4,14,000
Returns Outward 1,20,000
19,96,500 19,96,500
[Ans.: Total of corrected Trial Balance Rs. 19,96,500]

Q.6 [Preparation of corrected Trial Balance] The following Trial Balance has been
prepared by a newly appointed accountant. You are required to prepare the trial
balance in a correct form.
TRIAL BALANCE
As at 31st March, 2019
Debit balances Rs. Credit Balance Rs.
Cash in hand 137,500 Fixed Assets 100,000
Purchases 150,000 Capital 360,500
Sales 87,500 Discount Allowed 625
Return Outwards 2,500 Returns Inwards 6,250
Wages 2,000 Creditors 40,000
Debtors 50,000 Drawings 37,500
Bills Receivable 12,500 Discount received 250
Rent 500 Bills Payable 7,000
Interest paid 875
4,42,500 4,42,500
[Ans.: Total of corrected Trial Balance Rs. 4,97,750]

Q.7 Ms. Kajol provides you the following trial balance prepared by her accountant.
Since it does not agree, the owner has appointed you to find out the mistakes
and too prepare the corrected trial balance. Give reasons for any shifting of item
from one column to another.
TRIAL BALANCE
As at 31st March, 2019

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta
Chapter 8 16 Trial Balance

Name of Ledger Account Dr. (Amount) Cr. (Amount)

Cost of goods sold 4,50,000
Closing stock 1,20,000
Debtors 1,80,000
Creditors 90,000
Fixed assets 1,50,000
Opening stock 1,80,000
Expenses 60,000
Sales 6,29,000
Capital 2,70,000
Bills receivable 22,000
Bills Payable 10,000
Discount Allowed 20,000
Discount Received 1,500
Rent paid 4,500
Rent received 6,000
TOTAL 10,88,000 11,05,000
[Ans.: Total of corrected Trial Balance Rs. 10,06,500]

Basic Accounting for Non-Commerce students(GMC) CA. (Dr.) K. M. Bansal & Dr. Ritu Gupta