Page 133 - Book-keeping for Secondary Schools Student’s Book Form One
P. 133
Trial balance
4 Trade payables 30,000
5 Furniture 250,000
6 Purchases 740,000
7 Trade receivables 30,000
FOR ONLINE READING ONLY
8 Sales 250,000
9 Cash 210,000
10 Purchases returns 150,000
11 Sales returns 10,000
12 Wages 50,000
13 Drawings 200,000
14 Rent received 50,000
15 Other payables (Kamara) 2,500,000
Total 17,080,000 17,080,000
Activity 6.2
A trial balance is used as a tool to check the arithmetical accuracy of recording
and posting double entries. Sometimes the balancing of the trial balance does not
justify that everything was done correctly. Make a discussion with your colleague
and write down possible reasons that may cause the trial balance to agree even if
some of the entries posted in the general ledgers are not correct.
Summary
A trial balance extraction is a fundamental phase in the accounting process or cycle
it summarises the balances of all ledger accounts at a specific point in time. It plays
a crucial role in the double-entry accounting system, serving as a preliminary check
to ensure the accuracy of financial records. The trial balance lists all general ledger
accounts, with their corresponding debit and credit balances. By comparing the total
debits and total credits, businesses can verify that the accounting equation (Assets =
Liabilities + Equity) is in balance. If the trial balance balances, it suggests that the
double-entry accounting system has been applied correctly, and the total debits equal
the total credits. However, a balanced trial balance does not guarantee the absence of
errors, as mistakes could offset each other, leading to an appearance of accuracy despite
the presence of inaccuracies.
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Book Keeping Form 1 New 2024 FINAL.indd 125 18/10/2024 10:14
