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Note on Procedures of Preparation to Trial Balance

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The trial balance is prepared on daily or monthly or yearly basis as per the requirement of the business. It is prepared on a given specific date on a separate sheet of paper. There are three methods of preparing a trial balance. They are:

  1. Total method: Under this method, the trial balance is prepared with all the debit and credit totals of the ledger accounts.
  2. Balance method: Under this method, the trial balance is prepared with all the debit and credit balances of the ledger account.
  3. Compound method: Under this method, the trial balance is prepared both with the total and balance of all the ledger account. It is a combination of total and balance method which is also known as total cum balance method.

Generally, the trial balance is prepared by using the balance method. Under the trial balance, first of all, the transactions are recorded either in journal or subsidiary books. Then, the balances are obtained after posting into the ledger. At last, the trial balance is prepared with the help of the obtained ledger balances.

Specimen of Trial Balance

Specimen of Trial Balance
Specimen of Trial Balance

  • The trial balance is prepared on daily or monthly on yearly basis as per the requirement of the business.
  • Trial balance is prepared on a given date in a separate sheet of paper. 
  • The trial balance is prepared using a total method or balance method or compound method.
.

Very Short Questions

The trial balance can be prepared on daily or monthly or yearly basis as per the requirement of the business. It is prepared on a given date in a separate sheet of paper. It is prepared either using total method or balance method or compound method. The following are the procedures of preparing trial balance:

  1. Total method
    Under the total method, the trial balance is prepared with the debit and credit totals of all the ledger accounts.
  2. Balance method
    Under the balance method, the trial balance is prepared with the debit and credit balances of all the ledger accounts.
  3. Compound method
    Under the compound method, the trial balance is prepared with the debit and credit totals and balances of all the ledger accounts. Hence, the compound method is the combination of total and balance methods, which is also known as total cum balance method.

S.N.

Heads of Accounts

L.F

Debit Balance

Credit Balance

1.

Opening stock

10,000

2.

Furniture

15,000

3.

Purchases

30,000

4.

Salary

15,000

5.

Carriage

5,000

6.

Creditors

5,000

7.

Capital

20,000

8.

Sales

50,000

Total

75,000

75,000

S.N.

Heads of Accounts

L.F

Debit Balance

Credit Balance

1.

Capital

50,000

2.

Bank

30,000

3.

Cash

15,000

4.

Bills payable

10,000

5.

Land and building

45,000

6.

Reserve fund

25,000

7.

Creditors

15,000

8.

Debtors

10,000

Total

1,00,000

1,00,000

Trial Balance of Samjhana Medical Hall

As on 31st Ashadh

S.No.

Heads of Account

LF

Debit Balance

Credit Balance

1.

Capital

2,80,000

2.

Wages

15,000

3.

Bank loan

40,000

4.

Cash

5,000

5.

Interest paid

10,000

6.

Creditors

30,000

7.

Investment

1,00,000

8.

Opening stock

50,000

9.

Purchases

2,50,000

10.

Salary

70,000

11.

Sales

1,00,000

12.

Sales return

5,000

13.

Reserve fund

35,000

14.

Account payable

20,000

Total

5,05,000

5,05,000

Trial Balance of Image Emporium

As on 31st Ashadh

S.No.

Heads of Account

LF

Debit Balance

Credit Balance

1.

Opening Stock

10,000

2.

Purchases

20,000

3.

Sales

36,000

4.

Sundry debtors

5,000

5.

Sundry creditors

6,000

6.

Sales return

500

7.

Purchase return

1,000

8.

Capital

20,000

9.

Drawing

1,500

10.

Cash balance

26,000

Total

63,000

63,000

0%
  • The trial balance is prepared on ______ basis as per the requirement of the business.

    yearly


    all the options are correct


    daily


    monthly


  • In how many ways, the trial balance can be prepared?

    Two


    Four


    Three


    None


  • ______  is also known as total cum balance method.

    Compound


    Balance


    Total


    None


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