YOUR RIGHT TO A JOB

Chapter 12 Trial Balance

IN THIS CHAPTER YOU WILL BE ABLE TO LEARN…
55 Prepare Trial Balance

Before using the account balances to prepare Final Accounts, an attempt is made to prove that the total of
accounts with debit balances is in fact equal to the total of accounts with credit balances. This proof of the
equality of debit and credit balances is called a Trial Balance.
Preparation of Trial balance is of great help to the accountant although it is neither an account nor the part of
double entry system. It is merely a statement prepared by the accountant for his convenience. If the balance
agrees, he may be satisfied that arithmetical accuracy has been done although there may be some errors. But
Trial Balance helps us to prepare the final accounts of the firm.
Preparation of a Trial Balance
The trial balance can be prepared on a loose sheet that may have four columns: a) Heads of Account, b) Ledger
Folio, c) Debit Balance and d) credit balance.

Calculate the balances of all ledger accounts

Write down the heading

Write down the name of the accounts, LF number and

the balances in the respective columns

Add both the debit and credit columns to see whether

they agree

1. From the following ledger A/c balances, prepare a Trial Balance : `

Capital A/c 1,00,000
Sales A/c 70,000
Purchases A/c 80,000
Vikram’s A/c (Sundry Debtors) 46,000
Prava’s A/c (Sundry Creditors) 40,000
Rent received A/c 1,500
Bank A/c 66,700
Commission A/c 1,800
Stock A/c 15,000
Drawings A/c 2,000

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Ans:
Trial Balance of …. as on ….

Particulars L.F. Debit (`) Credit (`)

Capital A/c 1,00,000

Sales A/c 70,000

Purchases A/c 80,000

Vikram’s A/c 46,000
Prava’s A/c 40,000

Rent Received A/c 1,500

Bank A/c 66,700
Commission A/c 1,800
Stock A/c 15,000
Drawings A/c 2,000

Total 2,11,500 2,11,500

On 1st April 2018, Ajmal Khan commenced business with:

Cash ...................................................................................1,000
Bank....................................................................................3,000
Furniture & Fittings.........................................................2,000
The following transactions took place during the month of April’2019:

2018 1 Mr. Ajmal took a loan of ` 3,000.00 from Begum Akhtar by cheque and deposited the same into
April 2 bank on the same day.
Withdrew ` 300 from bank for petty cash purposes. Sold Yash goods on credit ` 1,000. Paid by
cheque as security deposit for obtaining electricity connection ` 40 .
3 Sold goods to Lalji on credit ` 600
5 Sold goods to Qureshi for cash ` 340, Deposited into bank on the same day.
6 Sold goods to Yash on credit ` 800
8 Yash returned goods to the value ` 100.
12 Purchased typewriter (second hand) by cheque ` 240.
13 Received cheque from Yash in payment for goods purchased on 2nd April less 10% cash discount
paid into bank.
14 Bought goods on credit from Dayal ` 2,400. Paid wages by cash ` 100.
15 Bought goods from Gurinder ` 3,000 less 10% trade discount.
18 Lalji pays cash ` 600 and the same was deposited into bank.

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20 Returned goods to Gurinder ` 1,000 (list price).

23 Ajmal Khan drew out of bank ` 800 to pay premium on his life policy. He was allowed 2 ½ %
rebate by insurance company. Net premium was paid in cash, balance retained in business.
25 Bought goods by cheque from Rajinder ` 300.
26 Withdrew goods from stock of ` 300 for private purposes.
Sold goods to Lalji on credit ` 400.
27 Paid Begum Akhtar a Cheque of ` 200 on account of loan and ` 40 for interest.
28 Paid electricity bill for the month by cheque ` 20. Received from Lalji cheque for ` 380 in full and
final settlement of his account, and the same was deposited into bank.
30 Lalji’s cheque dishonored and debit written off as bad. Acquired second hand car in exchange
of furniture ` 100, goods ` 160 and cheque ` 2200.
30 At the end of the month, expenses paid out of cash were sundry expenses ` 60, carriage ` 80.
Write up the books and prepare trial balances as at 30th April, 2019.

Solution: In the books of Ajmal Khan

JOURNAL

Amount
Date Particulars L.F.
Dr. Cr.
2018
April 1 Cash A/c………………………………………………Dr. 1,000
Bank A/c........................................................................ Dr. 3,000
Furniture & Fittings A/c.............................................. Dr. 2,000
To Capital A/c 6,000
(Being business started with Cash, Bank and Furniture)
Bank A/c………………………………………….Dr. 3,000
1 To Loan From Begum Akhtar A/c 3,000
(Being loan taken from Begum Akhtar and deposited
the same into bank)
Cash A/c........................................................................ Dr. © 300
2 To Bank A/c 300
(Being cash withdrawn from bank)
Yash A/c……………………………………….…Dr. 1,000
2 To Sales A/c 1,000
(Being goods sold to Yash on credit as per invoice no….)
Security for Electric Connection A/c……………Dr 40
To Bank A/c 40
(Being amount paid as security deposit for obtaining
2 electric connection vide cheque no……….)

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3 Lalji A/c……………………………………………Dr. 600

To Sales A/c 600
(Being goods sold to Lalji on credit as per invoice
no………)
5 Bank A/c………………………………………….Dr. 340
To Sales A/c 340
(Being goods sold on cash, and the same was deposited
into bank)
6 Yash A/c 800
To Sales A/c 800
(Being goods sold to Yash on credit as per invoice
no………..)
8 Sales Return A/c………………………………..Dr. 100
To Yash A/c 100
(Being a part of the goods sold to Yash, returned)
12 Type Writer A/c…………………………………Dr. 240
To Bank A/c 240
(Being amount paid towards purchase of type writer)
13 Bank A/c........................................................................ Dr. 900
Discount Allowed A/c................................................. Dr. 100
To Yash A/c 1000
(Being cash received from Yash after giving 10% cash
discount and deposited into Bank.)
14 Purchases A/c............................................................... Dr. 2400
To Dayal A/c 2400
(Being purchased goods from Dayal on credit.)
Wages A/c..................................................................... Dr. 100
To Cash A/c 100
(Being wages paid for cash)
15 Purchases A/c……………………………………..Dr. 2700
To Gurinder A/c 2700
(Being goods purchased from Gurinder as per Invoice
No…)
18 Bank A/c………………………………………….Dr. 600
To Lalji A/c 600
(Being cash received from Lalji on account)
20 Gurinder A/c……………………………………...Dr. 900
To Purchases Return A/c 900
(Being a part of goods purchased from Gurinder
returned due to poor quality)

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23 Drawings A/c…………………………………….Dr. 780

Cash A/c…………………………………………Dr. 20
To Bank A/c 800
(Being cash withdrawn from bank partially for the
owners personal use, and rest for the purpose of the
business)
25 Purchase A/c……………………………………Dr. 300
To Bank A/c 300
(Being goods purchased through cheque number …)
26 Drawings A/c……………………………………Dr. 300
To Purchases A/c 300
(Being goods taken by owner for his personal use)
Lalji A/c………………………………………….Dr. 400
To Sales A/c 400
(Being goods sold to Lalji on credit as per invoice no…)
27 Loan from Begum Akhtar A/c……………….…Dr. 200
Interest on Loan A/c………………………….…Dr. 40
To Bank A/c 240
(Being amount paid to Begum Akhtar, towards
repayment of loan and interest, vide cheque number.. )
28 Electricity Charges A/c………………………..Dr. 20
To Bank A/c 20
(Being amount paid towards electric bill for the month)
Bank A/c…………………………………….....Dr. 380
Discount Allowed A/c………………..………Dr. 20
To Lalji A/c 400
(Being amount received from Lalji after allowing
discount of ` 20)
30 Lalji A/c…………………………………………..Dr. 400
To Discount Allowed A/c……………………….Dr. 20
To Bank A/c 380
(Being cheque received from Lalji, returned by the
banker)
Bad Debt A/c…………………………………….Dr. 400
To Lalji A/c 400
(Being amount receivable from Lalji, written off as bad)

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Motor Car A/c……………………………………Dr. 2460

To Furniture A/c 100
To Purchases A/c 160
To Bank A/c 2200
(Being car purchased through exchange of stock and
furniture, balance paid by cheque)
General Expenses A/c…………………………...Dr. 60
Carriage A/c…………..………………………….Dr. 80
To Cash A/c 140
(Being amount paid in cash towards expenses)

Dr Cash Book Cr

Date Particulars LF Cash Bank Date Particulars LF Cash Bank

2018 2018
April 1 To Capital 1,000 3,000 April 1 By Cash © 300
1 To Loan from 3,000 1 By Security for
Begam Akhtar elec supply 40
12 By Type writer 100 240
5 To Bank © 300
14 By Wages
13 To Sales 340
23 By Drawings 780
18 To Yash 900
23 By Cash © 20
23 To Lalji 600 300
25 By Purchase
28 To Bank © 20 27 By Loan from
30 To Lalji 380 Begam Akhtar 200
27 By Int on Loan 40
28 By Electricity
Charges 20
30 By Lalji 380
30 By Motor Car 2200
30 By Gen Exp 60
30 By Carriage 80

30 By Balance c/d 1080 3700

1320 8220
1320 8220

Dr. Bad Debt A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Lalji A/c 400 30.04 By, P & L A/c 400
400 400

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Dr. Capital A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Drawings A/c 1080 01.04 By, Cash A/c 1000
By, Bank A/c 3000
By, Furniture & 2000
30.04 To Balance c/d 4920 Fixture A/c

6000 6000
Dr. Carriage A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Cash A/c 80 30.04 By P & L A/c 80
80 80
Dr. Motor Car A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Furniture & 100 30.04 By, Balance c/d 2460
Fixture A/c
To Purchase A/c 160
To Bank A/c 2200
2460 2460
Dr. Discount Allowed A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

13.04 To Yash A/c 100 30.04 By Lalji A/c 20
28.04 To Lalji A/c 20 30.04 By P & L A/c 100
120 120
Dr. Doyal A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Balance c/d 2400 14.04 By Purchases A/c 2400
2400 2400
Dr. Drawings A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

23.04 To Bank A/c 780 30.04 By Capital A/c 1080
26.04 To Purchases A/c 300
1080 1080
Dr. Electricity Charges A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

28.04 Bank A/c 20 30.04 By P & L A/c 20
20 20

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Dr. Security Deposit to Electric Supply A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

01.04 To Bank A/c 40 30.04 By Balance c/d 40
40 40
Dr. Furniture & Fixture A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

01.04 To Capital A/c 2000 30.04 By Motor Car A/c 100
30.04 By Balance c/d 1900
2000 2000
Dr. Gurinder A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

20.04 Purchase Return A/c 900 14.04 By Purchase A/c 2700
30.04 By Balance c/d 1800
2700 2700
Dr. Interest on Loan A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

27.04 To Bank A/c 40 30.04 By P & L A/c 40
40 40
Dr. Lalji A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

03.04 To Sales A/c 600 18.04 By Bank A/c 600
26.04 To Sales A/c 400 28.04 By Discount 20
Allowed A/c
30.04 To Discount 20 28.04 By Bank A/c 380
Allowed A/c
30.04 To Bank A/c 380 30.04 By Bad Debts A/c 400
1400 1400
Dr. Loan from Begam Akhtar A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

27.04 To Bank A/c 200 01.04 By Bank A/c 3000
30.04 To Balance c/d 2800
3000 3000
Dr. Purchases A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

14.04 To Doyal A/c 2400 26.04 By Drawings A/c 300
14.04 To Gurinder A/c 2700 30.04 By Motor Car A/c 160

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25.04 To Bank A/c 300 30.04 By Trading A/c 4940

5400 5400
Dr. Purchases Return A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Trading A/c 900 20.04 By Gurinder A/c 900
900 900

Dr. Sales A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

01.04 By Yash A/c 1000
03.04 By Lalji A/c 600
05.04 By Bank A/c 340
06.04 By Yash A/c 800
26.04 By Lalji A/c 400
30.04 To Trading A/c 3140
3140 3140

Dr. Sales Return A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

08.04 To Yash A/c 100 30.04 By Trading A/c 100
100 100

Dr. General Expenses A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

30.04 To Cash A/c 60 30.04 By P & L A/c 60
60 60

Dr. Type Writer A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

01.04 To Bank A/c 240 30.04 By Balance c/d 240

240 240

Dr. Wages A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

14.04 To Cash A/c 100 30.04 By Trading A/c 100
100 100

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Dr. Yash A/c Cr.

Date Particulars JF Amount Date Particulars JF Amount

01.04 To Sales A/c 1,000 08.04 By Sales Return A/c 100
06.04 To Sales A/c 800 13.04 By Discount 100
Allowed A/c
13.04 By Bank A/c 900
30.04 By Balance c/d 700
1,800 1,800

Trial Balance as on 30th April, 2018

Dr. (`) Cr. (`)

Cash A/c 1,080
Bank A/c 3,700
Bad Debts A/c 400
Capital A/c 4,920
Carriage A/c 80
Motor Car A/c 2,460
Discount Allowed A/c 100
Doyal A/c 2,400
Electricity Charges A/c 20
Security Deposit to Electric Supply A/c 40
Furniture & Fixture A/c 1,900
Gurinder A/c 1,800
Interest on Loan A/c 40
Loan from Begum Akhtar A/c 2,800
Purchase A/c 4,940
Purchase Return A/c 900
Sales A/c 3,140
Sales Return A/c 100
General Expenses A/c 60
Type Writer A/c 240
Wages A/c 100
Yash A/c 700
TOTAL 15,960 15,960
Closing Stock does not appear in the Trial Balance because a separate account for this is not opened. It
represents the balance of goods unsold out of opening stock and purchases.
However, at the end of the year, if the value of closing stock is adjusted against purchases, then closing stock
will appear in the Trial Balance.

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1. From the following ledger A/c balances, prepare a Trial Balance :

Particulars Amount (`) Particulars Amount (`)

Land and Building 70,000 Furniture and Fixtures 20,000
Shares in Apex Industries Ltd. 10,000 Medical Expenses 5,000
Cash at Bank 20,000 Salary paid 30,000
Rent received 20,000 Telephone Charges 5,000
Electricity Charges 20,000 Repairs of Building 1,000
Printing Charges 5,000 Accumulated Fund 1,80,000
Income tax paid 2,000 Municipal Taxes 1,000
Plant and Machinery 20,000 Dividend Received 10,000
Stationery 1,000
Trial Balance as on …..

Particulars L.F. Debit (`) Credit (`)

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2. The following Trial Balance is incorrect. Correct the same.

Trial Balance as on ….

Particulars L.F. Debit (`) Credit (`)

Capital 1,00,000
Building 25,000
Sundry Debtors 50,000
Dividend Received 10,000
Commission Received 5,000
Cash in hand 1,500
Miscellaneous Expenses 500
Purchase 98,000
Sales 60,000
Closing Stock 1,000
Trial Balance as on……

Particulars L.F. Debit (`) Credit (`)

3. From the following transactions pass the journal entries, post them into ledgers and prepare a Trial
Balance: `
01-06-18 Started business with cash 6,000
04-06-18 Purchased goods for resale 700
11-06-18 Bought stationery 130
15-06-18 Purchased goods for personal use 750
26-06-18 Paid wages 200
27-06-18 Sold goods for cash 2,250
27-06-18 Paid electricity bill 70
28-06-18 Paid postage 80
29-06-18 Paid for advertisement 30
30-06-18 Paid salary 150

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