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Preparation of Trial Balance

There are 2 types in which trial balance can be prepared:
  • Balance Method : Trial Balance, under this method, can be prepared only when all the ledger accounts are balanced. Debit balance amount is written in debit column of the trial balance and credit balance is written under credit column of trial balance against respective account’s head. Under this method, the balance of all the accounts including cash and bank are incorporated in the Trial Balance.

Illustration 1

Given below is a ledger extract relating to the business of A and Co. as on March 31, 2014. You are required to prepare the Trial Balance by the Balance Method.
 

Dr. Cash Account Cr.
Particulars Particulars
To Capital A/c 50,000 By Machinery A/c 15,000
To Y’s A/c 1,25,000 By Salaries A/c 12,500
To Cash Sales 2,500 By X’s A/c 1,05,000
    By Purchases 5,000
By Capital A/c 2,500
By Balance c/d 37,500
1,77,500 1,77,500
 

Dr.

Machinery Account

Cr.

Particulars

Particulars

To Cash A/c

15,000

By Balance c/d

15,000

15,000

15,000

 

Dr.

Salaries Account

Cr.

Particulars

Particulars

To Cash A/c

12,500

By Balance c/d

12,500

12,500

12,500

 

Dr.

Ratan’s Account

Cr.

Particulars

Particulars

To Cash A/c

1,05,000

By Purchases A/c

(Credit Purchases)

1,25,000

To Purchase Returns A/c 2,500  

To Balance c/d

 

17,500    

1,25,000

 

1,25,000

 

Dr.

Purchases Account

Cr.

Particulars

Particulars

To Cash A/c (Cash Purchases)

5,000

 

1,25,000

By Balance c/d

 

 

 

 

1,30,000

 

 

 

To Sundries as per Purchase
book (Credit Purchases)
 

1,30,000

1,30,000

 

Dr.

Purchases Returns Account

Cr.

Particulars

Particulars

To Balance c/d

2,500

By Sundries as per Purchases

Returns book

2,500

 

2,500

2,500

 

Dr.

Yogesh’s Account

Cr.

Particulars

Particulars

To Sales A/c (Credit Sales)

1,50,000

By Sales Returns A/c

By Cash A/c

By Balance c/d

500

1,25,000

24,500

 

1,50,000

 

1,50,000

 

Dr.

Sales Account

Cr.

Particulars

Particulars

To Balance c/d

1,52,500 

By Cash A/c (Cash Sales)

By Sundries as per Sales
Book (Credit Sales)

2,500

1,50,000

 

1,52,500

1,52,500

 

Dr.

Sales Return Account

Cr.

Particulars

Particulars

To Sundries as per Sales
Return Book

500

By Balance c/d

500

500

 

500

 

Dr.

Capital Account

Cr.

Particulars

Particulars

To Cash A/c

To Balance c/d

2,500

47,500

By Balance c/d

50,000

 

50,000

 

50,000

 

Solution

 

Trial Balance of X and Co. as on 31-03-2012

S. No.

Name of Account

L.F.

Debit ()

Credit ()

1.

Cash A/c

 

37,500

 

 
2. Machinery A/c 15,000
3. Salaries A/c 12,500
4. Ratan’s A/c   17,500
5. Purchases A/c 1,30,000  
6. Purchase Returns A/c   2,500
7. Yogesh’s A/c 24,500  
8. Sales A/c   1,52,500
9. Sales Return A/c 500  
10. Capital A/c   47,500
   

2,20,000

2,20,000





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