Trial Balance

 Trial Balance

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

 

Write the meaning of trial balance.

MEANING OF TRIAL BALANCE

Trial balance is not an account.

It is the balance of the ledgers.

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

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

Trial balance is base for preparing final account.

After preparing trial balance, we can prepare trading account, profit and loss account and balance sheet.

 

 

Write any four objectives of trial balance.

What are the importances of trial balance?

OBJECTIVES OR IMPORTANCE OF TRIAL BALANCES

Check arithmetical accuracy

Trial balance helps to check arithmetical errors.

Trial balance determines only the arithmetical accuracy and not the accounting accuracy.

If debit and credit balances are equal, we assume ledgers are correct.

Help to find-out accounting errors

The disagreement of a trial balance indicates that there are some accounting errors.

Trial balance helps to find-out some accounting error.

Summarize the financial transactions

Trial balance is the summary of all financial transaction during an accounting period.

It is prepared from all accounting balances.

 

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Click on link for YouTube videos CHAPTERS OF CLASS 11

ACCOUNTING EQUATION  http://tiny.cc/c89jkz

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

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz

GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

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Write down types of trial balance.

TYPES OF TRIAL BALANCE

Unadjusted or normal trial balance

The trial balance is prepared without making any adjustments; it is known unadjusted trial balance.

It is also called rough trial balance.

Adjusted trial balance

Adjustment of journal entry with unadjusted trial balance is known adjusted trial balance. 

Firms usually redraft their trial balance after adjusting journal entries to check the balance.

It also provides a complete list of ledger accounts balances.

 

Write any three errors disclosed by trial balance.

ERRORS SHOWN (DISCLOSED) BY TRIAL BALANCE

Partial omission

When transaction recorded in journal entry but not posted in ledger is known partial omission.

Forget to carry forward is also partial omission.

Such error effects total of trial balance.

Wrong posting

When transaction amount is recorded more or less than actual, it is known wrong posting.

Suppose Rs 50,000 received from Laxmi is recorded Rs 5,000.

Here Rs 45,000 (50,000  ̶  5,000) is less recorded.

Such error effects total of trial balance.

Posting on wrong side

When transaction is recorded correct in journal entry but posted in wrong side of ledger, it is known wrong posting.

Suppose goods sold to Usha Rs 20,000. It must be debited in Usha’s account but posted in credit side.

Such error effects total of trial balance.

 

Write any three errors not disclosed by trial balance.

ERRORS NOT SHOWN (NOT DISCLOSED) BY TRIAL BALANCE

Complete omission

When transaction is not recorded in journal entry or not posting into ledger, it is known complete omission.

Suppose salary paid Rs 50,000 not recorded in journal entry.

Such error does not affect total of trial balance.

Wrong entry in subsidiary book

When wrong entry is made in subsidiary book, it does not affect total of trial balance.

Suppose goods sold to EP Traders Rs 54,000 is recorded as Rs 45,000.

Enter in wrong account

When amount of one’s account enter to another account, it is known enter in wrong account.

Suppose cash paid to Raveena Rs 35,000 is recorded as Rabina.

Such error does not affect total of trial balance.

 

CAUSES FOR DISAGREEMENT OF TRIAL BALANCE

Major causes for disagreement of trial balance are:

Double posting of a transaction from journal to ledger.

Wrong posting or omission of posting one aspect of a transaction in ledger.

Wrong entry or omission of entry in journal but correct posting in the ledger.

Posting a transaction on the wrong side of an account.

Error in casting special journals.

  

Write the meaning of adjusted trial balance.

ADJUSTED TRIAL BALANCE

An adjusted trial balance is combination of unadjusted trial balance and adjusting entries. 

Even after the preparation of trial balance, there may remain some financial transactions whose adjustments are to be made accordingly. Necessary adjustments of all those transactions are adjusted are made in adjusted trial balance

 

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