BCO Company has following ledger balances. Prepare an unadjusted trial balance as on 1/1/2001.Cash balance − Rs.52000/-Account receivables − Rs. 80000/-Inventory − Rs.35000/-Accounts payable − Rs. 56000/-Long term liability − Rs. 95000/-Equity shares − Rs.15000/-Dividend paid − Rs.1500/-Revenue − Rs. 28450/-Cost of goods sold − Rs. 22000/-Rent − Rs.1750/-Wages − Rs. 1250/-Interest − Rs.950/-SolutionThe solution is as follows −      BCO CompanyUnadjusted trial balance1/1/2001 ParticularsDebitCreditCash52000Accounts receivable80000Inventory35000Accounts payable56000Long term liability95000Equity shares15000Dividend paid1500Revenue28450Cost of goods sold22000Rent1750Wages1250Interest950Total194450194450

Preparing unadjusted trial balance is the third step in the accounting cycle. It is prepared after general ledger and before the adjusted trial balance.In this, all the balances of ledger accounts are listed. It is not suitable for preparing financial statements, balance sheets and income statements because it does not comply with Generally Accepted Accounting Standards (GAAP) or International Financial Reporting standards (IFRS).The purpose of an unadjusted trial balance is to check the debits and credits mathematical equality.ErrorsThe errors of unadjusted trial balance are due to the following aspects −Postings are not correctly posted.Balances are not determined correctly.Ledger balances are ... Read More

Refer the data given below to prepare an adjusted trial balance −CBS ltdTrial Balance 31-03-2007ParticularsDebit (in rupees)Credit (in rupees)Debtor200000Salary35000Rent55000Cash50000Sales250000Purchases60000Furniture25000Loan135000Creditors40000Total425000425000Adjustments are made in salary and rentSalary due = Rs. 55000Rent (refundable deposit) included = Rs. 30000Adjusted entriesThe adjusted entries are as follows −Salary accountTo balance b/d35000To outstanding salary55000By balance c/d900009000090000   Rent accountTo balance b/d55000By rent deposited30000By balance c/d250005500055000Adjusted trial balanceThe adjusted trial balance for the given data is as follows −CBS ltdAdjusted Trial balance 31-03-2007ParticularsDebit (in rupees)Credit (in rupees)Debtor200000Salary90000Rent25000Rent deposit30000Cash50000Sales250000Purchases60000Furniture25000Loan135000Creditors40000Outstanding salary55000Total480000480000Read More

A report consists of balances of all general ledger balances for a period of time called trial balance. It includes all major items like assets, liabilities, revenues, equity, losses and gains. It shows debit balances and credit balances that are recorded in the general ledger at a particular time.This format includes date, particulars/account description, debit balance and credit balance (balance recorded in respective field according to nature of account). Trial balance shows only account totals whereas general ledger shows all account transactions.Sheets are divided into different types according to their nature (transaction recording called as journal entry, summarizing and categorizing ... Read More

In this trial balance, adjustments are made to initial balance to all the required accounts. Adjustments are made to an initial trial balance to bring the financial statements into compliance with GAAP (Generally Accepted Accounting principles) or IFRS (International Financial Reporting Standards). The adjusted trial balance is an internal report.Main purposeThe main purposes of the adjusted trial balance are as follows −Verification of total debt balances to credit balances of all accounts.To construct an income statement, statement of cash flow and balance sheet.Monitors the company's performance.It makes sure the entries are made correctly.It is used as an internal document only ... Read More

Refer the following data to prepare the trial balance −Books of accountsParticularsAmount (in rupees)ParticularsAmount (in rupees)ParticularsAmount (in rupees)Cash in hand6000Sales257000Rent2500Cash at bank300000Purchases50000Drawings18000Sundry debtors25000Carriage inwards2500Stock12000Sundry creditors18000Salaries20000Capital A/c190000Bills receivables28000Marketing expenses3000Furniture's and fixtures6500Bills payable10000Insurance paid1500SolutionThe trial balance is given below −      XYZ ltd31/03/2009 Sl.NoAccount TitleBalancedebitCredit1Cash in hand60002Cash at bank3000003Sundry debtors250004Sundry creditors180005Bills receivables280006Bills payable100007Capital Ac1900008Drawings180009Sales25700010Purchases5000011Carriage inwards250012Salaries2000013Marketing expenses300014Insurance paid150015Furniture's and fixtures650016Stock1200017Rent2500Total475000475000

Refer the data given below −Name of accountAmount (in rupees)Name of accountAmount (in rupees)BalancesTotal(credit)Total(debit)Cash in hand100002000010000Supplies3000Accounts receivable17500Revenue fee20000Accounts payable100020001000Note payable5000Revenue (unearned)800Common stock7000Furniture and fitting3500Machinery4000SolutionThe trial balance prepared by using total and balance method is given below -      TitleDD/MM/YYYY Sl.NoParticularsLedger folioTotalsBalancesdebitCreditdebitCredit1Cash200001100090002Supplies300030003Accounts receivable800080004Revenue (Fee)10000100005Account payable500015000100006Note payable250025007Revenue (unearned)100010008Common stock350035009Furniture and fitting3000300010Machinery40004000Total43000430002700027000

This method is used rarely because it duplicates the work. In this method, both balances and totals of debit and credit sides are tabulated in separate columns. Debit totals are recorded in the debit total column and credit totals are recorded in the credit column separately. Similarly, debit balances are recorded in the debit balance column and credit balance is recorded in the credit balance column.FormatThe format for preparing the trial balance by using balances and totals method is given below −      TitleDD/MM/YYYY Sl.NoParticularsLedger folioTotalsBalancesdebitCreditTotalHere, Title − Name of the company.DD/MM/YYYY − Trial balance prepared Date, Month ... Read More

Refer the data given below −Name of accountAmount (in rupees)Name of accountAmount (in rupees)Cash (debit)25000Supplies1600Accounts receivable7000Revenue fee15500Accounts payable (debit)5600Note payable8200Revenue (unearned)4400Common stock10500Furniture and fitting3500Machinery6000Cash (Credit)6500Account payable (credit)3600SolutionGiven below is the trial balance by using totals method −      ABC ltd28/02/2001 Sl.NoName of AccountLedger folioBalancedebitCredit1Cash2500065002Supplies16003Accounts receivables70004Revenue (Fee)155005Account payable560036006Note payable82007Unearned revenue44008Common stock105009Furniture and fitting350010Machinery6000Total4870048700

This method is not widely used because the accuracy of balances is not determined in this method. In the totals method, both credit total and debit total is tabulated in two separate columns and credit and debit sides of the ledger are totaled.FormatThe format for preparing the trial balance by using totals method is given below −      TitleDD/MM/YYYY Sl.NoParticularsLedger folioTotalsdebitCreditTotalHere, Title − Name of the company.DD/MM/YYYY − Trial balance prepared Date, Month and Year.Sl. No − Ledger account number (serial numbers).Particulars − Full account name of ledger account.Ledger folio − Page number of ledger balance of accounts.Debit − ... Read More