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Section 3: Trial balance
ACTIVITY1:
To draw up a trial balance
[LO 3.3]
Once the ledger accounts have been completed, the accounts are closed and transferred to a Trial Balance.
Accounts that have entries only on the debit or credit side, are simply added up to obtain a total.
In the case of accounts that have entries on the debit as well as the credit side, the balance is calculated. This means a balance that is the difference between the two sides is calculated. For example:
| Bank Account | |||||||||||
| 2003 | 2003 | ||||||||||
| Nov. | 30 | Total received | CRJ | 20 698 | 00 | Nov. | 30 | Total payments | CPJ | 15 633 | 00 |
| 30 | Balance | b/f | 5 065 | 00 | |||||||
| 20 698 | 00 | 20 698 | 00 | ||||||||
| Des. | 1 | Balance | c/f | 5 065 | 00 |
The balances carried forward and the totals are transferred to the Trial Balance.
Although the Trial Balance indicates that a credit entry was done for every debit entry, certain errors will not be shown up by the Trial Balance. Thererfore a Trial Balance that balances cannot always be accepted as proof of correctness.
TRIAL BALANCE OF RANDOM STORES AS AT 30 JUNE 2003
| Dt. | Cr. | ||
| Balance sheet section | |||
| Capital | B1 | 199 322 | |
| Withdrawals | B2 | 15 000 | |
| Land and Buildings | B3 | 105 000 | |
| Vehicles | B4 | 28 000 | |
| Equipment | B5 | 32 125 | |
| Trading inventory | B6 | 45 310 | |
| Debtors control | B7 | 12 180 | |
| Bank | B8 | 11 754 | |
| Change | B9 | 600 | |
| Petty cash | B10 | 250 | |
| Creditors control | B11 | 15 994 | |
| Nominal Account section | |||
| Sales | N1 | 350 000 | |
| Selling costs | N2 | 250 000 | |
| Rates and Taxes | N3 | 4 210 | |
| Insurance | N4 | 3 850 | |
| Water and Electricity | N5 | 4 952 | |
| Telephone | N6 | 4 810 | |
| Stationery | N7 | 2 750 | |
| Repairs | N8 | 5 325 | |
| Wages | N9 | 18 000 | |
| Salaries | N10 | 26 000 | |
| Rental income | N11 | 4 800 | |
| Totals | 570 116 | 570 116 | |
ASSIGNMENT 1 : Trial Balance
ASSIGNMENT 2 : Auxiliary Journals, Ledger and Trial Balance
1. Record the transactions for April in the following auxiliary journals: CRJ 3.7.1, CPJ 3.7.1, DJ 3.7.1 and CJ 3.7.1
2. Close the journals at the end of the month
3. Transfer to the ledger accounts and indicate folio numbers
4. Calculate the balances, or totals where necessary
5. Draw up a trial balance at the end of April
| DATE | TO WHOM ISSUED, FOR | AMOUNT |
| 2003 | ||
| April 1 | P. Hatting, for capital contribution | R105 000 |
| 7 | V. Jansen, to pay his debt | R 660 |
| Blommie Bloemiste, for rental income | R 500 | |
| 14 | D. Coetzee, payment on account | R 300 |
| 21 | G. Ferreira, payment on account | R 200 |
| 28 | V. Jansen, to pay the amount of the invoice issued on 17 April | R 246 |
| DATE | SALES | SELLING COSTS |
| 2003 | ||
| April 7 | R5 800 | R4 600 |
| 17 | R3 820 | R2 440 |
| 21 | R7 620 | R5 740 |
| 28 | R1 944 | R1 406 |
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