Cambridge IGCSE 0452 and O Level Accounting 7707

Chapter 3
Trial Balance
It is a statement of ledger/account balances at a particular date.
Remember, Trial Balance is a statement not an account.

Uses of Trial Balance

Following are the advantages to prepare a Trial Balance

 To check the arithmetical accuracy of the double entry

 Assist in preparation of financial statements.
 Identify errors

Limitations of Trial Balance

 It cannot identify complete omission entry error

 If debit and credit entry is reverse, trial balance cannot reveal this error
 If any transaction is recorded in the wrong head e.g. if an expense is debited to an assets account. Trial
balance will not be able to detect that mistake too

Format
Trial Balance of ABC Ltd
As at 31st December, 2022
Accounts balances Debit ($) Credit ($)
Assets XX
Liabilities XX
Expenses XX
Incomes XX
Equity XX
Drawings XX
Sales returns XX
Provisions XX
Purchase returns XX
Total (same) XX XX

Practice Questions

Q # 1 Prepare T accounts from the following transactions, balance all accounts and prepare trial balance

2022 May Business Transactions

1 Started business with £10000 in the bank
2 Bought goods £290 on credit from D James
3 Bought fixtures and fittings £1150 paying by cheque
5 Sold good for cash £1140
6 Bought Goods on credit £325 from C Monty
10 Paid rent by cash £200
12 Bought stationery £25 paying by cheque
18 Goods returned to D James £41
21 Received rent of £25 by cheque for sublet of corner space
23 Sold goods on credit to G Cross $845

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 Cambridge IGCSE 0452 and O Level Accounting 7707

24 Bought a van paying by cheque $4100

30 Paid the month’s wages by cash $360
31 The proprietor took cash for his personal use $80

Q # 2 Prepare T accounts from the following transactions, balance all accounts and prepare trial balance

2020 March Business Transactions

1 Started in business with cash $8500
2 Bought goods on credit from W Young $420
3 Paid rent by cash $210
4 Paid $6000 cash of the business into a bank account
5 Sold goods on credit to D Unbar $192
7 Bought stationary $25 by cheque
11 Cash sales $81
14 Goods returned by us to W young $54
17 Sold goods on credit to J Harper $212
20 Paid repairs to the building by cash $78
22 D Unbar returned goods to us $22
27 Paid W Young by cheque $366
28 Cash purchases $470
29 Bought a van paying by cheque $3850
30 Paid motor expenses in cash $62
31 Bought fixtures $840 on credit from B Coal

Past Paper Questions

Q # 1 Complete the following table, indicating with a tick where each account would appear in a trial
balance. [4]

Q # 2 Saul prepared the following trial balance at 31 March 2018 which contains errors.

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 Cambridge IGCSE 0452 and O Level Accounting 7707

REQUIRED

Prepare a corrected trial balance at 31 March 2018 [7]

Q # 3 (a) State two reasons why a trader may prepare a trial balance [2]
Deepa is a trader. She extracted the following balances from her books of account on 31 December 2015.

REQUIRED

(b) Prepare Deepa’s trial balance at 31 December 2015. [9]

Q # 4 Danbi Wyske runs her business from rented premises. The following balances were extracted from
her books on 30 April 2003.
$
Inventory 1 May 2002 4000
Revenue 80000
Purchases 62000
Trade receivables 10000
Trade payables 9000
Electricity paid 3000
General expenses 7000
Cash at bank 5000
Drawings 8000
Rent and insurance paid 6000
Equipment at cost 45000
Provision for depreciation of equipment 16000
Equity ?

Prepare Danbi’s trial balance as at 30 April 2003, showing her Capital account balance. (14)

Q # 5 Hilota has a business supplying spare parts for cars. His financial year ends on 31 March. At 31
March 2006 his accounts showed the following balances:

$
Non-current assets at cost 22 000
Provision for depreciation 9 300
Inventory (at 1 April 2005) 3 200
Balance at bank (Dr) 1 550
Revenue 56 500
Sales returns 500
Purchases 34 200
Carriage outwards 950

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 Cambridge IGCSE 0452 and O Level Accounting 7707

Rent 4 000
Wages 7 200
General expenses 2 600
Equity 20 000
Drawings 9 600

REQUIRED

Prepare Hilota’s Trial Balance at 31 March 2006. (12)

Q # 6 Stella Maris started a business as a bookseller on 1 May 2008 with initial equity of $10000 which she
deposited in a new business bank account. She is not an experienced bookkeeper but has drawn up the
following trial balance at 31 October 2008. Stella has put certain balances in the wrong column and may
have made other errors.

Required
Prepare a corrected trial balance at 31 October 2008. (10)

Q # 7 Mbane sells craft items from a market stall. He sells for cash and buys his goods on credit.
He prepared the following trial balance at 31 October 2012. Although the trial balance totals were equal,
Mbane had made some errors.

Mbane had inventory on 1 November 2011 of $4500.

REQUIRED
Prepare a corrected trial balance at 31 October 2012. [7]

Q # 8 The following balances are taken from Teresa’s books of account on 31 January 2013.

$
Drawings 29 100
Vehicles 16 200
Rent 3 400
Inventory at 1 February 2012 19 100

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 Cambridge IGCSE 0452 and O Level Accounting 7707

Equipment 12 100
Trade payables 16 600
Trade receivables 19 300
Revenue 210 100
Purchases 131 600
Carriage inwards 400
Discount received 1 100
Bank overdraft 17 000
Wages 21 800
General expenses 11 200
Equity ?

Prepare Teresa’s trial balance at 31 January 2013 showing her capital account balance. [8]

Q # 9 The trial balance which she drew up, and which contained errors, was as follows

REQUIRED
Prepare a corrected trial balance at 30 April 2014.

Q # 10 Ebenon, a sole trader, extracted the following balances from his books of account on 31 December
2014.

Prepare Ebenon’s trial balance at 31 December 2014. [8]

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 Cambridge IGCSE 0452 and O Level Accounting 7707

Q # 11 Jason Moore had the following balances in his books on 31 October 2008:

$
Provision for doubtful debts 150
Equity 16 550
Drawings 8 000
Plant and equipment 18 000
Provision for depreciation of plant and equipment 3 000
Inventory 4 000
Trade Receivables 3000
Trade Payables 2000
Cash 1500
Revenue 40 000
Purchases 21 000
Sundry expenses 6200

REQUIRED

(a) Extract the trial balance for Jason Moore at 31 October 2008. [3]
(b) State two uses of a trial balance. [2]

Q # 12 On 31 May 2010, Leung extracted the following balances from his books.

$
Gross profit 6 650
Inventory (stock) 4 600
Bank loan 3 500
Trade Receivables 1 200
Trade Payables 2 100
Office equipment 4 000
Bank 1 750 Dr
Discount received 150
Rent and expenses 3 850
Equity ?

REQUIRED
Prepare the trial balance at 31 May 2010. (10)

Q # 13 The balances on Christos’ books at 31 July 2011 were as follows:

$
Equity ?
Drawings 8 000
Office furniture 5 000
Provision for depreciation on office furniture 3 200
Inventory 4 150
Bank overdraft 250
Trade payables 2 950
Sundry expenses 10 600
Purchases 32 400
Provision for doubtful debts 350
Revenue (sales) 53 750
Trade receivables 6 250

REQUIRED

Prepare the trial balance for Christos at 31 July 2011, including the balance on the capital account. (6)

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Q # 14 The following balances were extracted from the books of Fashran on 30 April 2014.

$
Trade payables 6 450
Trade receivables 9 230
Revenue 68 400
Purchases 29 800
Inventory 1 May 2013 5100
Expenses 22 350
Bank overdraft 830
Non-current assets 24 000
Provision for depreciation – Non-current assets 7800
REQUIRED

Prepare the trial balance showing Fashran’s capital at 30 April 2014. (5)

Q # 15 Kadar provided the following information at the end of his financial year on 31 March 2019

Prepare the trial balance of Kadar at 31 March 2019 [9]

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