Preparation of Trial Balance (Format, Problem and Solution)

Arjun EP

Published on: November 2, 2020

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Preparation of Trial Balance

Trial balance is prepared to check arithmetical accuracy of debit and credit balance.

If there is any error, it is rectified with journal entries.

Trial balance can be prepared at any time.

Generally, it is prepared at the end of every month.

But it can be prepared quarterly or half yearly.

It is compulsorily prepared at the close of every accounting period to verify the arithmetical accuracy of the ledger accounts.

SN.	Debit (Dr)	Amount	Credit (Cr)	Amount
	Assets:		Capital and reserve:
	Goodwill	xxxx	Capital	xxxx
	Land and building	xxxx	General reserve	xxxx
	Plant and machinery	xxxx	Capital reserve	xxxx
	Furniture and fitting	xxxx	Reserve fund	xxxx
	Stock (inventory, merchandise)	xxxx	Reserve for bad debts (doubtful debts)	xxxx
	Prepaid expenses	xxxx	Liabilities:
	Debtors (book debts)	xxxx	Creditors	xxxx
	Bills receivable	xxxx	Bills payable	xxxx
	Account receivable	xxxx	Account payable	xxxx
	Accrued income	xxxx	Loan (10% Loan)	xxxx
	Cash balance	xxxx	Outstanding expenses	xxxx
	Bank balance	xxxx	Advance income	xxxx
	Expenses:		Revenue and income:
	Opening stock	xxxx	Sales	xxxx
	Purchase	xxxx	Interest received	xxxx
	Carriage inward/outward	xxxx	Discount received	xxxx
	Purchase expenses	xxxx	Commission received	xxxx
	Factory expenses	xxxx	Rent received	xxxx
	Office expenses	xxxx	Bad debts received	xxxx
	Selling expenses	xxxx	Other income	xxxx
	Distribution expenses	xxxx
	Financial expenses	xxxx	Gain:
	Bad debts	xxxx	Gain on sales of assets	xxxx
	Discount allowed	xxxx	Gain on sales of investment	xxxx
	Interest paid	xxxx
	Commission paid	xxxx	Return:
	Rent paid	xxxx	Purchase return, return outward	xxxx
	Other expenses	xxxx
	Losses:
	Loss on sales of assets	xxxx
	Loss on sales of investment	xxxx
	Return:
	Sales return, return inward	xxxx
		xxxx		xxxxx

Note: Generally closing stock is adjusted separately.

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Click on link for YouTube videos:
Basic Journal Entries in Nepali	http://tiny.cc/uaakkz
Basic Journal Entries	http://tiny.cc/8aakkz
Journal Entry and Ledger	http://tiny.cc/caakkz
Ledger	http://tiny.cc/haakkz
Subsidiary Book	http://tiny.cc/399jkz
Cash Book	http://tiny.cc/889jkz
Trial Balance & Adjusted Trial Balance	http://tiny.cc/c59jkz
Final Accounts	http://tiny.cc/y89jkz
Government Accounting	http://tiny.cc/hcakkz
Goswara Voucher (Journal Voucher)	http://tiny.cc/hcakkz

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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 2A

Salman Traders has following balances of ledger on 31^st December 2019:

Required: Trial balance

[Answer: Total 555,000]

SOLUTION

Trial balance of Salman Traders

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PROBLEMS AND ANSWERS

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 2A

XYZ Traders has following accounts balance on 31^st December 2019:

Required: Trial balance

[Answer: Total 615,000]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 2B

The following is ledgers balances of AK Trading Concern on 31^st December 2019:

Required: Trial balance

[Answer: Total 949,500]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Currency of your country

PROBLEM: 2C

The following ledger balances of AF Trading Concern for the year ending 31^st December 2019 is given: