Toki F To know how to post the journal entries to ledgers > To attempt the balancing of ledger. } Toleam about and understand the procedure of preparing Trial Balance > Toinier the possibilities of errors even if trial balance tallies. > Toidentify the need for the Suspense Account in case Trial Balance doesn tally oy ournal records all business transactions separately and articular person, asset, expense or income ey occur on different dates. Hence As we know, transactions pertaining to a pa different places in the journal as the bring the similar transactions together at one place. Thus, 1 have a consolidated view o fhe uimilar transactions different accounts are prepared in the ledget Aledger may be defined as a summary statement of all the transactions relating to 9 person, asset, expense or income which have taken place during a given period of time and shows their net effect. Encyclopaedia Britannica defines Ledger as follows : “A group of accounts is known as & Ledger. The general led: accounts : it contains an account for each asset liability, proprie expense account. The ledger contains the same information as the journal. However, in the Journal each transaction is ely recorded as a unit, The entire effect of a transaction is completely recorded in one information is posted to the ledger where it is & The ledger includes all the basic accounts nee statements.” journal fails to is the main book of storship, revenue and complet place in the Journal Periodically the same ‘ording to individual ite of the financial mulated ace mas. sded for the preparation to the passing of entries in the ledge", ted into the ledger. L. ly. One account is ust ned only to facilital just be post yered consecutive! jger is a register Thus, a journal is maintail ually every entry recorded in the journal m having a number of pages which are numassigned ane pagw in tho leduer, However account are mo LEDGER AND TRIAL HALANCE iP-the transactions, portaining to» partient IW may be assigned more than one pago in the ledger, An liven Peres accounts opened in the ledger is wiven at tho beginning of the tedyer ney Ceara anny reference. It the principal book of mecounta tccnune It Kou vain Schicving the objectives of accounting, It givos anawere to the lullowiny noni questions 1, What are the total xales to an individual customor ? 2. What are the total purchases from an individual supplior ? 8. How much amount (4 owed hy others ? 4. How much amount is owed (0 othora 8, What is the amount of profit or 6. What is the fin N particular dite ¢ 4 , gay Sei Gal The procedure BUILDING ACCOUNT debit and credit 300,000 |B 'y Cash Ae ly closed. 30,000 | By Profit & Loss A/c (loss) 38 total : writing 20,000 | By Balance c/d 1 means carnitd '3,50,000 edi ie = it oat 3,44,000 . 1 To Bales AAS yee | the credit it balance in Prepare a personal account of Varun from the following transactions in the books of Ganesh more thas 299, 2021 have 2% Mar March { | Debit balance of Varun € 10,050, 20 Received cheque from Varun 1,800. 5 Bought from Varun 1,600. 24 Varun claimed as allowance of 7 Cheque issued to Varun 1,800. 300 for damaged goods. 9 Sold to Varun & 3,600, 28 Vi xd goods 12 Ganesh sold goods to Varun 1,600. by Gai 450. 14 Varun sold goods to Ganesh 900. (BM BiVARUN'S ACCOUNT (In the Books of a To Balance bia 7 | To Bank Ave To Sales A/c To Saios To Purchases Returns A/c To Balance bia Journalise 2021 July 1 Govind started his business with the following Cash © 2,000 Goods 1,000 Furniture ® 500 § Sold goods to Raghavan ¢ 500 Sold goods for cash * 300 § Received from Raghavan on account 300 SOLUTION ‘Cash Ac Stock Alc Furniture Ave To Capital Ac 808 brought as capital) 5 | Raghavan’s Arc Cash Ave To Sales Ave (Being goods sold) ish Ale To Raghavan's Ae (Cash received) 12 | Purchases Ao To Mukundan’s A/o {Boing goods purchased on croc) By Purchases Ac by By Sales Rone By Balance cid n the ledger 12, Purchased goods trom Mukundar 900 15 Paid Mukundan & 560 20 Paid interest to Mukundan & 100 31 Paid stationery charges a Paid sularios & 2% ( Paid rent & 16 (BEM Bangalore, Dec. 2006 Modified) cash sd iet9 Ci (eoing ation" fet A (poing #1e] 2021 z 3.500} July 1 |By Sundries Aug. 1 |By Balance bid RAGHAVAN’S ACCOUNT e] 2021 5 | ToSaies Alc 500} July9 |By Cash Alc 300 July 31 [By Balance id = | 00 Totaerce [200 MUKUNDAN'S ACCOUNT |<] 2 7 July 12 | By Purchases A/c By Balance bid Aug. 1 hi Furnit ‘ansactions in the Journal of the Delh Past them into the Ledger. j 2021 Jaz 1 Started business with cash 7 10,000, * 2 Deposited into bank % 9,000 | = 3 Puschased machinery for € 5,000 from Jawahar and gave him a cheque for o the amount. S100! " Bb +s of machinery =| 1 " 2 Be eed fae Gon na nf the lst price of € 2,000. He allowed 10% ____ Trade Discount. er onomet s 5 2 Furniture costing 7 500 was used in furnis oe 1,000 and allowed him 5% 17 Sold Furniture to Naresh of the list price 0! © “ nt the aes raresh for €-980 in full settlement and 50 * 2 Received a cheque from N cheque to bank. == Bs ~5.000 by cheque) rae instalation charg Purchases Aye — To Naveen's 90 palmber purchased tim Navee 10% nt) 188 On machinery) ©” 7 2.000 less To Purchases (Being tumiture cosy ing the office) Naresh’s ave To Sales {Geing furniture sold to Naresh for © 1,000 ang him 5% trade discouny Bank Alc Discount Allowed aie To Naresh’ Ae (Being cheque of ¢ 929 in full sett 23 | Naveen’s ae To Bank ajc To Discount Received Aig * 600 used in furnishing To Cash Are (Being amount paid for Wages and ren) Total for the moni Cash ee ii 2021 Mian, 29wii &\ oo Ledger CAPITAL ACCOUNT ZF] Amound| Date 2021 CASH ACCOUNT To Capital Ac 10,000 BANK ACCOUNT cana Naresh last 9,000 3 990 Naveer MACHINERY ACCOUNT To Bank Ale 5,000 15 |" _Cash Alc 100 I NAVEEN 2021 z] 22 juan. 29] To Bank Alc n 729 | * Discount Alc 50 PURCHASES ACCOUNT 021 = 202 Jdan.20 |] To Nawsen 1,800 0 : OFFICE FURNITURE ACCOUN 2021 z ] san. 23| To Purchases Alc 500 | NARESH 2021 Z| 2021 jen. 25| To Sales Alc 950 | Jan SALES ACCOUNT | 2021, Jan. 25 | By Naresh DISCOUNT ALLOWED ACCOUNT F z a4 aDISCOUNT RECEIVED ACCOUNT 2021 Jan. 25 | By Naveen WAGES ACCOUNT z 2021 Jan, 31] To Cash Alc 350 RENT ACCOUNT 2021 e Jan. 31] To Cash A/c 200 ond Is the following account correctly prepared ? If not, prepare it correctly CASH ACCOUNT To Furniture (Cash purchase) To Drawings By Balance b/d ‘i By Shyam Sunder (Sale of Apr : goods on eredit) 300 | April 2 Pegca Ss 2000 | By Saleces soz | April 3 'o Depreciation 2 eae 200 To Commission (received) ayy Exacta pezired) a M April 4 To Credit Sales 10,000 | By Payment of Commis om 7 lance c/d 6,400 | By Discount Allowed 200 Ar — By Bad Debts 20 April 10 By Stationery 400 ; By Bank (Amount withdrawn / April 1 from bank for office use) 5,000 910 April 19 39,10 100 = April 21 (BBM Bangalore Dec, 2006) 5,1 99 April 3 SOLUTION a Cash Account given in the Illustration is not correctly prepared. It is correctly prepared a5 9N@% = Apri below : CASH ACCOUNT ___ Receipts = Payments Balance bid 15,700 Drawings Cash Sales 13,700. Furniture Commission (received) 1,000, Salaries Interest (received) 4,000 | By Payment of Commission Bank (Amount withdrawn for Stationery use) 5,000 | By Balance cid [To_Balance bis sco fam Sunder (sale of goods on credit) d aration of Cash Accounta ent of GST while preparing Ledger Accounts - discussed the accounting treatment of GST in journal entries. These journal havi ic Femain the source for creating ledgers. Posting of various GST accounts will tr itional ledgers of (i) Input CGST (ii) Input SGST (ii) Input IGST (iu) Output CGST () Output SGST (vi) Output IGST Few illustrations are given for students to understand the posting in ledger ty, mata kd (With GST) Journalise the following transactions of Deepak, Delhi for the April, —J—~ _ 2021, post them in Ledger Accounts and balance ther zp soa April 1 | Deepak started business with cash* 300,000, April. 2 | Bought goods for cash 80,000 April 3 | Opened Bank Account with cash* 60,000 April 4 | Sold goods for cash 70,000 April Bought goods from Agra (UP) on credit 50,000 April Sold goods to Ravi, Delhi on credit 25,000 Purchased Machinery costin %20,000 from Sahil & Co. Gurugram (Haryana) and payment is made by cheque Paid to Vikas in cash on account* 30,000 Received loan from Rajesh and deposited the same into bank* 38,000 Goods returned to vikas 5,000 April 26 | Withdrew from bank for personal us 5,000 April Paid to Vikas by cheuge in full settlement* April Received cash from Ravi 10,000 April Purchased stationery for cash 5,000 April 30 | Paid wages and salaries* 20,000 CGST and SGST is levied @ 6% ea: tra-state transactions and IGST @ 12% on inter-state transactions, GST is not levied on transactions marked (*). SOLUTION In the Book of Deepak JOURNAL, dae | —————~Partculars LR] on@) | ore) 2021 April 1 | Cash Alc Or 3,00,000 le ie ie sicao etoted with capital of € 8,00,000 $.00,000 brought in cash)April 2 April 3 April 4 Apa Apri 10 April 15 Apr 19, April 21 Apri 23 Aon 26 Purchases Alc Dr, Input CGST Ale Dr, Input SGST Ale Or, To Cash A/c (Being the Intra-state purchase of goods for cash, paid CGST and SGST @6% each) Bank Alc Dr To Cash Alc (Being the bank account opened by depositing cash into bank) Cash Alc To Sales Alc To Output CGST Ave To Output SGST A/c (Being the intra-state sale of goods, charged CGST ang SGST @6% each) Purchases Alc ine Input IGST Ave P To Vikas (Being the inter-state purchase of goods on credit from Vikas, plus IGST @12% ) Ravi Dr To Sales Ale To Output CGST A/c To Output IGST Alc (Being the intra-state sale of goods on credit to Rakesh charged CGST and SGST @6% each) Machinery Alc pe Input IGST Ave Dr, To Bank Ac {Being the machinery purchased, plus IGST @ 12% and Payment made by cheque) Vikas To Cash We {Being the amount paid to vikas in cash) Bank Alc To Rajesh’s Loan Ac (Geing the loan from Rajesh recel = alosh received Vikas To Retums Outward A‘c ei (aos Put iasT Ae ng tho goods return, Drawings Ale AUG Vikas, Input GST roverseg) To Bank Ate Dr Dr. Or. ‘and deposited into (Being the amou = mount withdrawn ftom bank tor Personal 80,000 4,800 4,800 60,000 78,400 50,000 6,000 28,000 60,00¢ 200 8,000 §,000 __LEDGER AND TRIAL BALANCE 89,609 60,000 (ec reco ash jae |C April 30 ‘apr 201500 1500 e720 30,000 18,000 AND TRIAL BALANCE ais Or. 20,4 a9 27 Pn To Bank Ac 00 To Discount Received A/c {Being the amount paid to Vikas by cheque and discount received) ‘Gash Ac Dr 10,000 an To Ravi _ (Boing the cash received trom Rakesh) 0 | Statonery Nc Or A919) | nut CGST Alc Dr Input SGST Ale By To Cash Alc (Being the stationery purchased for cash, paid CGST and SGST @6% each) 19,900 500 ‘pri 30. | Wages and Salaries Alc Dr. 20,000 To Cash Ale 20,00 (Being the wages and salaries paid in cash) a Ledger o CASH ACCOUNT ~ Date Paniculars [JF] < | Date Particulars [JF] moat 2021 April 1 | To Capital Alc 300,000] April 2 | By Purchases A/c 89,600 April 4 | To Sales Ac 70,000 | April 2 | By input CGST A/c 4,800 Apri 4 | To Output CGST Ale 4,200| April 2 | By input SGST Ac 4.200 April 4 | To Output SGST A/c 4,200 | April 3 | By Bank A/c 60,000 Apri29 | To Ravi 10,000 apri19 | By vikas 30,000 April0 | By Stationery Alc 5000 ‘pri'30 | By input CGST Ae 300 Apri'20 | By Input SGST Ale 300 Apil30 | By Wages and Salaries Alc 20,000 Apri'30 | By Balance eld 1,73,600 3,88,400 3.88,400 May _1 | To Balance b/d 1,73,600 CAPITAL ACCOUNT & _ Particulars FA tone Date Particulars we] 2021 —_ Aprl30 | To Balance cid 3,00,000| April 1 | By Cash Ale Ae 3,00,000 2 May _1_| By Balance bid 3,00,000 cr Dr, PURCHASES ACCOUNT rE - a. Particulars: a i Date Partowiers 2021 i 2021 1,90,000 m Apri 2 | To Cash Ae 0,000 | April 30 | By Balance o April 7 | To Vikas 0,000 1,900 1,30,000 May 1 | To Balance b/d 1,30,000 éBANK ACCOUNT. Particulars ‘To Cash Alc “To Rajesh's Loan Alc 98,000 z Date 2021 ‘Aptil 15 April 15 April 26 April 27 April 30 5,900 Particulars By Machinery A/c By Input IGST Ale By Drawings Alc By Vikas By Balance cid SALES ACCOUNT . Date 2021 95,000 | April 4 April 10 95,000 May 1 Particulars By Cash Ac By Ravi By Balance bid VIKAS To Fetus Outward Ale To Input iGST Alc To Bank Nc To Discount Received Ale 7 Date 2021 0,000 | April 7 April 7 5,000 600 19,900 500 56,000 Particulars By Purchases Al By Input IGST Ale RAVI Particulars To Sales Ale To Output CGST Ale To Output SGST Ae To Balance bid Date 2021 April 29 April30 Particulars By Cash Ac By Balance cd Date 2021 Aprii30ee MACHINERY ACCOUNT May 1_| To Balance bid er Parteulars robark Ae By Balance cig To Balance bid RAJESH’S LOAN ACCOUNT 1 Partoulars Parlevtars To Balance c/d- By Bank Alc By Balance bia RETURNS OUTWARD ACCOUNT Parculars Particulars To Balance old By Vikas By Balance bia DRAWINGS ACCOUr Particulars Particulars To Bank Ale Balance cid May_1 | To Balance bie Dr. STATIONERY ACCOUNT Tose |__Paricutars Partioulars 2021 Apii30 | To Cash Ale By Balance cl May 1_| To Balance b/d Dr. WAGES AND SAI \CCOUNT _ Se Partculars 2021 Apmt30 | To cash Alc By Balance cf INPUT CGST ACCOUNT Particulars Merl 21 To Cash ac (Purchases) By Balance ctoo April 30 | To Cash A/c LEDGER AND y R ANI TRIAL BALA, # (Stationery) 300 5,100 | ete Dr. INPUT SGST ACCOUNT _ Date [Particulars 7a td Date Particulars wer 2021 2021 La April 2 | To Cash Alc April30 | By Balance c/d 510 bod (Purchases) 4,800 April 30 | To Cash Alc (Stationery) 300 5,100 Bia i Or. OUTPUT CGST ACCOUNT ce ‘Date |___ Pariculars JF] ¢ Date Particulars uF bs 2021 2021 dc April30 | To Balance o/d April 4 | By Cash Alc (Sales) 4,200 if April 10 | By Ravi (Sales) lis 5,700 5,700 Or. OUTPUT SGST ACCOUNT Date _ Particulars JF. Date | ___ Particulars LE. ei 2021 2021 April 30 | To Balance cid 5,700| Apri 4 | By Cash A/c (Sales) April10 | By Ravi (Sales) : 5,700 5,700 : ale : Dr. INPUT IGST ACCOUNT C ' Date Particulars Je. Date Particulars F 5 2021 2021 April 7 | To Vikas ‘April23 | By Vikas (Purchases) 6,000 (Returns Outward) 600 April 15 | To Bank Alc Aprii30 | By Balance cid 12,60¢ (Machinery) 7,200 13,200 13,200 Or. DISCOUNT RECEIVED ACCOUNT cr Date Particulars JF Date Particulars JFL = | 2021 April30 | To Balance cid 500] April27 | By Vikas 500AND TRIAL BALANCE eRe ww that the fundamental principle of Double Entry System of Accounting i Toko debit, there must be a corresponding credit. Thus, for every debit or a that oor debits given to one or several accounts, there is a corresponding credit or a ies of dePr te of an equal amount given to some other account or accounts and vice We kno series a ay therefore, that the sum total of debit amounts should equal the credit see I ire ledger at any date. But ifthe various accounts inthe ledger are balanced smount® fatal ofall debit balances must be equal to the total of all credit balances if the thet sof accounts are arithmetically accurate Thus, at the end of the financial year or at any other tine, the balances ofall the accounts are extracted and written up in a statement known as Trial Bilance and leery tatalled up to te0 if the total of debit balances is equal to the total of eredit Jirvtyes. A Trial Balance may thus be defined as a statement of debit and credit totals or talgnees extracted from the various accounts in the ledger with a view to test the grithmetical accuracy of the books. ‘The agreement of the Trial Balance reveals that both the aspects of each transaction have been recorded and that the books are arithmetically accurate. If the Trial Balance does not agree, it shows that there are some errors which must be detected and rectified ifthe correct final accounts are to be prepared. Thus, Trial Balance forms a connecting link between the ledger accounts and the final accounts. Objectives of Trial Balance Following are the main objectives of preparing the trial balance : (j) To have balances of all the accounts of the ledger in order to avoid the necessity of going through the pages of the ledger to find it out (ii) To have a proof that the double entry of each transaction has been recc because of its agreement (ii) To have arithmetic accuracy of the books of accounts because of the trial balance. (iv) To have material for preparing the profit and loss account « the business. Limitations of Trial Balance Following are the main itations of the trial balance rded and balance in those concerns where double entry system adopted by the small @ Trial balance can be prepared only accounting is adopted. This system is ve concerns. (ii) Though trial balance gives are certain errors which are not disclosed trial balance is not a conclusive proof of the accur (iii) Ie trial balance is not prepared correctly then the { reflect the true and fair view of the state of affai of the bu: and decisions are made by the various groups of persons W mislead such persons. ry costly and cannot bi ooks of accounts but there arithmetic accuracy of the b aid that 1 by the trial balance. That is why it is ‘acy of the books of accounts, . 1a] accounts prepared will not ness. Whatever cone ill not ect and will Jusionsss _LEDGER AND TRIAL RAL BALAN Cy Preparation of Trial Balance ‘A trial balance can be prepared by the following two methods : 1. Total Method. In this method, the debit and credit totals of each account , shown in the two amount columns (one for the debit total and the other for the cre, total) against it. 2. Balance Method. In this method, the difference of each account is extracted, debit side of an account is bigger in amount than the credit side, the difference is py i the debit column of the Trial Balance and if the credit side is bigger, the difference i written in the credit column of the Trial Balance. y Trial Balance can be prepared on a loose sheet having four columns, 4 specimen is given as follows TRIAL BALANCE OF.. as on or. cr. Balance | Balance (or Total) | (or Total Of the two methods of preparation, the second is usually used in ca facilitates the preparation of the final accounts a oa From the following balances, prepare a Trial Balance Particulars z Particulars Drawings 2,000 | Sales 00 General Expenses 40 | Purchases 40,00 Buildings 20,000 | Bank Overdraft | 10,00 Stock 16,540 | Capital | = | Debtors 6,280 Creditors 2,500 | Bad Debts 550 Loan to Ravi 7,880 | (BBM Bangalore, Dec. 2006) SOLUTION TRIAL BALANCE as on... Name of Accounts 15, 16. 1. | Drawings w. 2 | General Expenses & = 3. | Buildings 20,000 4. | Stock 16,540 -~-3e8e8/7) 1 3\ 15,450 Purchase Returns 640 Commission (Cr.) iture & Fittings Motor Car 6,250 Sales Returns Buildings 7,500 Advertisement ‘Total Debtors 3,800 Interest Account (Dr. ‘Total Creditors 2,500 Cash Balance Bad Debts 125 Insurance & Tax Stock on 1-4-2020 3,460 Salaries Purchases 5,475 (BBM Bangalore, Dec. 2004 Modified) TRIAL BALANCE as on 31-3-2021 ‘Name of the Account Cr. Amount Capital Account Sales Fumiture & Fittings Motor Car Buildings Total Debtors Total Creditors Bad Debts Opening Stock Purchases Bank (Overdraft) Purchase Returns Commission Sales Returns ‘Advertisement Interest A/c Cash Balance Insurance and Tax Salaries 39,800 Be.LEDGER AND TRIAL BALA, ~ falance is not a conclusive proof as to the abs cal dication of the arithmetical accuracy. The Trial Balan. ors of the following types remain, ing ‘The agreement of a Trial B: of the books. It only gives an in may, agree and yet there may be some er undisclosed. (®) Omission of an entry in a subsidiary book both the debit and credit of that tre the agreement of the Trial Balance will not be affected in any way ‘A wrong entry in a subsidiary book. If a credit purchase of 7 465 from Anny is wrongly written as % 564 in the Purchases Book, such an error will not be disclosed f, the Trial Balance. As the posting on both the debit side of Purchases Account and cregi side of Annu’s Account will be with the wrong amoun| Prial Balance yl agree. (iii) Posting an item to the correct side but in the wrong account. If purchase of € 500 from Vasant Desai has been credited to Himanshu Desai instead o Vasant Desai, it will not affect the agreement of the Trial Balance, so the Trial Balance will not detect such an error. (iv) Compensating errors. These are errors which compensate themselves in th net result, i.e., over-debits or under-debits of various accounts being neutralised by the Fré in a subsidiary book. If an entry has not been recorde, nsaction would be omitted anj t of € 564, so the over-credits or under-credits to the same extent of some other accounts. For example Tarun under- posting of ¢ 500 on the debit side cf a certain account would be compensated Dat under-posting of 100 on the credit side of another account and an omission of cred 502 alse posting of 7 400 to a third account. It is quite possible that this error may neutralised by over-posting of € 500 on the debit side in some other account or accounts Jan. ct the agreement of the Tria (v) Errors of principle. These errors will not aff Balance as they arise from the debiting or crediting of wrong he be inconsistent with the fundamental principles of double entr; € 6,550 spent on extension of building wrongly debited to Repairs Account instead o! Building Account will not affect the agreement of the Trial Balance. Thus, such errors arise whenever an asset is treated as an expense or vice versa or a liability is treated an income or vice versa. The disagreement of the Trial Balance will disclose the following clas errors : (@ An item omitted to be posted from a sub: purchase of € 1,000 from Navin omitted to be credited to his error, the figure of sundry creditors to be shown in the would ads of account counting. For example es of ary book into the ledger, i.e. 4 ecount. As a result of this 1 Balance will reduce by % 1,000 and the total of the credit side of the Trial Balance will be % 1,000 les Sou compared to the debit side of the Trial Balance. L (ii) Posting of wrong amount to a ledger account, /« A credit sale of & 2,000 te ~.. Aarti wrongly posted to her account as % 200. The effect of this error will be that the Da reduced by * 1,800 and the total of the debit side of the 20 figure of sundry debtors will be Trial Balance will be % 1,800 less than the total of the credit side of the Trial Balance on (iii) Posting an amount to the wrong side of the ledger account, i.e, rao discount allowed to a customer wrongly posted to the credit instead of the debit side & the Discount Account. As a result of this error, the credit side of the Trial Balance wil exceed by % 100 (double the amount of the error)AND TRIAL BALANCE Be — ncing ' wrong additions or balancing of led, (eo) ( Mewoivend af. the f ger accounts, i.e., While canal Aceoun financial year, cre Etch ee0 Ci Gepras € 79,000. AS a result of this error, the ereait age Re ea al of the Trial Balance will be (o) Wrong totalling of subsidiary books, ic., § ofthis error, credit side of the Trial Balan Pirro eos Rewunt will appear at a higher figure on the credit side of the Teal fee oe ae Sales (ei An item in the subsidiary book posted twice to e wane payment of € 1,000 to a creditor posted twice to his account piesa peau {68 f (vii) Omission of a balance of an account in the Trial Bal. Sa bes my have been omitted to be included in the Trial Balanes ” "PS" bank B, (viii) Balance of some account wrongly entered in the Ty 1 Bal ling) 7519 in Stationery Account wrongly entered as 2 eee rain ae ee (éx) Balance of some account written to the wrong side of the Trial B 041) lance of Commission Earned Account wrongly shown to the debit si maine Jebit side instead of the . Bey coir side of th Trial Balance By (x) Anerror in the totalling of the Trial Balance will bring the disagreement oft ay es Balane | MNT tie a From the following transactions, pass necessary Jour wntries in the b eng) Tarun & Co, and post them in Ledger and p rial Balance 0 of oy Date | Particulars ays) 2021 acum Jan. 1 | Tarun started business with Cash 1,00,000 tthe by 2 | Purchased Goods for % 40,000 plus CGST and St oa 5 | Sold goods for % 50,000 plus CGST and SGST @ 6% each co 6 | Purchased goods from Prateck for 25,000 plus IGST @ 12 le 8 | Sold goods to Ravi for ¢ 30,000 plus CGST and SGST @ ¢ chen 10 | Cash paid to Prateek 28,000 re 14 | Cash received from Ravi 33,600 20 | Purchased goods for Cash from Prateek for % 20,000 plus C and SGST @ 6% each a 20 | Withdrew cash for personal use 208 ; o4 | Purchased goods from Deepak for € 22,000 plus IGST.@ 12% ae oF 28 | Cash paid to Deepak, Discount allowed by him gah ‘al 31 | Paid Salaries ay, SOLUTION In the Books of Tarun & Co. ‘JOURNAL ame Le 0 Date Particulars & on 100.000} 00 | 2021 ; Jan. 1 | Cash Alc ; To Capital A/c 2] (Being Cash brought in as capita) __—Jan. 2 Jan. 6 Jan. 8 Jan. 10 Jan. 14 Jan. 20 Jan, 20 Jan. 24 | Jan. 28 Jan. 31 aaa Purchases Alc Or. Input CGST Arc Or. Input SGST Ac Dr. To Cash (Being the purchase made for cash) Cash Ale * Or. To Sales Alc To Output CGST Ale To Output SGST a/c (Being the goods sold for cash) Purchases A/c Or Input IGST Alc Dr. To Prateok (Being the purchases made from Sohan) (Outside the state) Ravi Ac Or. To Sales A/c To Output CGST A/c To Output SGST Ave | (Being the sales made to Ravi) Prateek Ac Or. To Cash Alc (Being cash paid to Prateek) Cash Ae Or To Ravi Alc (Being cash received from Ravi) Purchases Alc Dr Input CGST ale Dr Input SGST Ac Dr. To Cash Ac (Being goods purchases made for cash) Drawings A/d Or. To Cash Ac Purchases Alc Or. Input IGST Alc To Deepak Alc (Being purchases made from Deepak) | Deepak Alc Or. ToCash To Discount Received A/c (Being cash paid to Deepak and he allowed a discount of 640) Salaries Alc Dr. To Cash Ac EDGER ANI ND TRIAL Ba, TAL BALA, 40,000 2,400 2,400 4. 56,000 50 004 9.00 300 25,000 3,000 33,600 28,000 3,600 20,000 1,200 1,200 2,000 22,000 2,640 24,640 12,000 1,800 180 28,000 22,400 2,000 24,640 24,000 640 12,000 Fal Date 202 Jan. 3 F Dal 20. Jan. Jan Jan dan40, 209) ‘TRIAL BALANCE 2409 j 2409) CASH ACCOUNT 4 ato eacewse PF} —¢__} Dato Particulars JF. zg 56 Sy goat a ‘3 009 wnt | Capital Ac 1,00,000| Jan. 2 | By Purchases Alc 40,000 His |Tosales Ae 50,000} Jan.2 | By Input CST A/c 2,400 fan's | ToOutput cast 3,000 | Jan.2 | By Input SGST A/c 2,400 My 8 | TooupusesT 3,000 | Jan. 10 | By Prateek A/c 28,000 My Jgn ta | ToRavi Ae 33,600 | Jan. 20 | By Purchase Alc 20,000 % Jan. 20 } By input CGST Ac 1,200 25.000 Jan. 20 | By Input SGST Ac 1,200 s Jan. 20 | By Drawings 2,000 009 Jan. 28 | By Deepak Ale 24,000 Jan. 31 | By Salaries 42,000 ay Jan. 31 | By Balance cid 56,400 189,600 33,600 CAPITAL ACCOUNT a a at - a Particulars |JF| Date Paruers IF.) oe mp2 2021 TQ Jan.31 | To Balance cid 1,00,000| Jan.1 | By Cash Alc 1,00,000 28,000 2021 Feb.1_| By Balance bid 4,00,000 ay PURCHASE ACCOUNT 2 sy Particulars Je] oe Date Pariculars [JF] @ Sa 2021 To Cash Ac 40,000 Jan. 31. | By Balance cid 20,000 ‘ian,6 | To Prateek Alc 25,000 es an. 20 | To Cash A/c 20,000 4 Jan. 24 | To Deepak 22,000 _ 1,200 107,000, 1,07,000 na ‘SALES ACCOUNT cr 2,000 Particulars de ¢ | date Particulars [JF] * a al 021 31 | To Balance Jan.8 | By Ravi 90,000 2,640 aa 80,000 PRATEEK ACCOUNT or. 640 a Date picasa] Vee a ao Date Paricuiers | JF.) _€ + — * me van 6 | By Purchases No 2500 Jan, 10 | To Cash Alc Input iGST Ae a 28,000LEDGER AND TRIAL Baty eo RAVI ACCOUNT j Particulars [UF] z _]_ Date Particulars JET | 2021 4 To Sales 30,000 | Jan. 14 | By Cash Ac a ot To Output CGST A/c 1,800 0 To Output SGST A/c 1,800 vat 33,600 g 33605 tL + 3.609 br DRAWINGS ACCOUNT < — g| 2) || Se el a w]e a 2021 2021 : Jan. 20 | To Cash 2,000 | Jan. 31 | By Balance c/d 2,000 Ja 2,000 2 - . 2,000 br DEEPAK ACCOUNT a : &.| py Date | Particulars JFl = Particulars JE] = 2021 van. 28 | To Cash A/c 24,000 By Purchases A/c 22,000 J Jan. 28 By Input IGST A/c 2,640 640 24,640 2480 | 9 im DISCOUNT RECEIVED ACCOUNT Date | __ Particulars JAF. 5 Date Particulars JF| 2 . } 2021 2021 } van. 31 | To Balance c/d 640] Jan. 28 | By Deepak Alc 640 L SALARIES ACCOUNT a 2 Dr. G __ Date Particulars JF. @ Date Particulars JF] 2021 2021 Jan. 31 | To Cash A/c 12,000 Jan. 31 | By Balance cid 12,000 ! I! INPUT CGST ACCOUNT a | Dr. f: Date Particulars A Date Particulars JF] i! 2021 2021 Hl Jan.2 | To Cash Alc Jan. 31 | By Balance o/d 3,600 (Purchases) 2,400 Jan. 20 | To Cash Ac ; (Purchases) 1,200 3,600 3,600we INPUT @QQT ACCOUNT > eee] = = J ¢ Date Particulars Tepe % BEE ocr an 2021 ; . Jan. 31 ‘ waa |Teomnae, — By Balance cid 3,000 To Cash A’c Kay Jen.20 | T° (Purchases) 1,200 3,600 [8 3,600 INPUT IGST ACCOUNT ya [__Patieuers [JF] _¢ | baw] —Parcoae — a 2021 : : To Prateek A/c 3,000} Jan. 31 | By Balance oid To Deopak Alc 2,040 te 5,640 OUTPUT CGsT ACCOUNT Particulars JF. To Balance cid 021 Jan. 5 Jan, 8 4,800 4,800 OUTPUT SGST ACCOUNT Particulars JF] Date Particulars 2021 To Balance cid 4,800| Jan.5 | By Cash (Salo) Jan.8 | By Ravi (Salos) 4,800 By Cash A/c (Salon) By Ravi Alc (Si 6,040 JF 3,000 1,800 4,800 3,000 1,800 4,800 as 1 1st Janu TRIAL BALANCE OF TARUN & CO. 1 as Amount Head LE; Dabit (*) Credit (*) Capital Alc 1,00,000 Cash Ave 66,400 Purchasos Alc 1,07,000 Sales A/c 60,000 Drawings Alc 2,000 ld Discount Received A/c s Salaries Alc 12.0% t Input CGST Ale a Input SGST A/c AA gat ‘INPULIGST Arc 4,800 Output CGST Ale 4,800 Output SGST A/c 790,240] _1,00,240 Total Note : input GST (CGST, SGST an the case may be. The same has Statements also. eT been discussed in wutput GST (CGST, SGST and IGST) a8 4 GST) are so og chapter 1 and Chap fer 5 : Financialec £4 rat ee ae BU A book-keeper, taking out a trial balance as on 30th June, 2021, found that agree. He proceeded to check the entries and discovered the following errors a 1. A credit sale of 7 1,000 to Ajay had been correctly entered in the Sales B, Ajay's Account had been debited with 7 100 only 2. The total of the Bills Payable Book, 7 5,000 had been posted to the credit of p, Receivable Account. “ 4. 2 2,500 paid to Ram had been wrongly posted to Shyam 4. % 100 owing by a customer had been omitted from the list of sundry debtors 5. The discount column of the Cash Book representing disc allowed to custor has been over-added by 7 10. 6, Goods worth 7 100 taken by the proprietor omitted to be recorded in the book 7. Depreciation on furniture, 7 100, had not been posted to Depreciation Account 8. The total of Sales Book had been added @ 1,000 short Which of the above errors caused the totals of the Trial Balance to disagree and | how much did the totals differ ? SOLUTION The effect of the above noted errors on the Trial Balance will be as follows 1. Ajay’s Account has been given less debit for 7 900, so the debit side of the Trial Balance would be short by 7 900. 2. This error will not affect the agreement of the Trial Balance because the posting of the Payable Book has been made to the correct side but in the wrong account. The credit give to Bills Receivable Account instead of Bills Payable Account does not affect the agreement of the Trial Balance. This error will not affect the agreement of the Trial Balance because the amount paid ha been posted to the right side though to a wrong account Sundry debtors have been shown in the Trial Balance with a less amount of % 100, so debit side of the Trial Balance is short by 7 100. Discount Account has been given an excess debit of ® 10 so debit side of the Trial exceeds by 7 10 This error will have no effect on the agreement of the Trial Balance because the dual as of the entry has been omitted, /.e., neither of the two accounts involved in this transaction has been given debit or credi Depreciation on furniture has not been debited to Depreciation Account, so debit side of the’ Trial Balance will be 7100 too short Sales Account has been given less credit for 7 1,000, so credit side of the Trial Balance would be short by % 1,000. The combined effect of ail the errors is that the credit side of the Trial Balance would exceed the debit side by 7 90. Errors of Commission i Errors of commission arise as result of some clerical mistakes. These errors arise due to some positive act of commission on the part of the person responsible for the maintenance of the books of account. They are committed while recording transactions. Examples (a) Mistake in transferring the balance of an account to the trial balance or omitting to write the balance of an account in the trial balance.TRIAL BALANCE (p) Mistake in balancing an account istake in posting in so far as the (c) Mistake in pos amount is wrongly writt. mistake, for example, suits Ester figuies=to write € 115 in sta zak of? ist, is will cause a mistake of & 36 erat Taek This wl and a corresponding difference in the trial (@) Making an entry on the wrong side. For example, if instead of deb ; ” st ebiting a sn ih 50 cred with ne anon the dit ila cethp taal as shorter by 2 1,000. A mis h baie y mistake on the wrong side causes double the (@ A mistake in the casting of subsidiary books. A mistake in th f ‘ y A mistal total of the Purchases Book will affect the Purchase Account; a mistake in the total of the Sales Book will mean a corresponding mistake in the Sales Account Similarly total of the Returns Book, if wrongly done, would mean that the Returns Inwards ‘Account or Returns Outwards Account will be posted with wrong amounts. These mistakes will be reflected in the trial balance. It must be noted that a mistake in the totals of the subsidiary books will not affect the correctness of the various personal accounts of customers and creditors. Error of Ommission This error is a type of clerical error which arises not due to the lack of knowledge but (due to the negligence, overlook, etc. This error arises because of the act of omission by the person responsible for the maintenance of books of account. This can be of two types (i) complete omission; and (ii) partial omission (@) Complete Omission : When any particular transaction has not at all been entered in the journal or in the book of original entry, it cannot be posted into the ledger at all and a complete error of omission will occur. The trial balance is not affected at all by such errors e.g. failure to record completely credit sales in Sales Book : This means that the transaction is entered in the subsidiary hh errors affect the agreement of trial Jlumns of the cash book. (6) Partial Omission book, but is not posted to the ledger, suc! balance eg. Omitting to post the discount col Location of Errors Whenever a Trial Balance disagrees, the following steps shoul locate the causes of the difference : 1. Recheck the totals of the Trial Balance and ascertain the exact difference in the Trial Balance. 2. Divide the difference of tl balance of the same amount in the pare been recorded on the wrong si louble the amount. i jal Balance 3. If the mistake is not located by the above steps, Be snes es nae A je by 9 ° should be divided by 9. If the difference 15 Se edie sears when 578 written as transpositi lacement of figures. digits of the numbers sposition or transp! ment takes place ee 569.40. If there id be taken to ¢ amount of two and find out if there is any be that such a balance might ing difference of he Trial Balance by ‘Trial Balance. It may 1 de of the Trial Balance, thus caus! 75, 197 and 791 and so on. A transplace ee Berets too latior right, e6,when © B:G24 38 TC whenNNT tense a0 rena Lae is a transposition or transplacement of figures, the search can be narrowed doy, fumbers where these errors might have been made. My '4, See that the balances of all accounts including cash and bank balances have i, included in the Trial Balance. ee 5. See that the opening balances have been correctly brought forward in the curr, year's books. " 6 Ifthe difference is of a large amount, compare the Trial Balance of the current y with that of the previous year and see that the figures under similar head of accou; ery near the same as those of the previous year and whether their balances fall on th, same side of the Trial Balance. If the difference between the previous year figures ang the current year figures is large one, establish the causes of difference 7. If the above listed steps fail to detect the errors, check your work as follows (i) Check the totals of the subsidiary books paying particular attention to ‘Carr forwards’. (ii) Check the posting made from the Journal or subsidiary books in the le (iii) Re-check the balances extracted from the ledger (iv) Re-cast the list of balances. at are If all these efforts fail to locate the errors, all the books of prime entry (subsidiary books) must be cast, and, if necessary, the postings to the ledger should be re-checked Suspense Account = If it is not possible to locate the errors in spite of the above steps, the difference of the trial balance is transferred to the Suspense Account and the trial balance is thus tallied Later on, when the errors will be located, they can be rectified through the Suspense Account. The suspense account will be eliminated when all errors will be located. ILLUSTRATION 11 Journalise the following transactions, post them into the Ledger and prepare the ‘Trial Balance. 2021 January 1 Started business with 7 10,000, paid into Bank & 5,000. 3 Bought Furniture for & 900. he 4 Purchased goods from Mohan & Co. for % 4,000 for cash. 5 Sold goods for = 1,700. 7 Paid Telephone rent for the year ¢ 400. i 8 Purchased goods for % 1,000 from Bir & Co. » 10 Paid 100 for advertisement by cheque » 11 Bought one Typewriter for € 750 from Universal Typewriter Co. on credit » 12 Sold goods to Bedi & Co. for ¢ 2,900. » 14 Withdrew ¢ 350 from the Bank for private use. » 16 Sold goods to Omega & Co. for 7 650 for cash. » 95 Received cash from Bedi & Co. % 2,850, discount allowed % 50. » 96 Paid into bank ¢ 2,500 » 31. Issued cheque for % 300 in favour of the landlord for rent for January. » 31 Paid Salaries to staff ¢ 600. 9 » 31. Paid cash % 950 Bir & Co. in full settlement of their account10 " 12 14 16 25 EO (Fumiture purchased) _ (Goods purchased for cash) Telephone Rent Alc Or (Paid Telephone rent) (Goods purchased on credit) (Goods sold on credit) incon ae (Cash brought in as Capital) Bank Alc Be To Cash Alc (Cash deposited in the bank) Fumiture A/c Or To Cash Alc Purchases A/c De To Cash Alc Cash Ale Or To Sales A/c (Goods sold for Cash) To Cash Alc Purchases A/c To Bir & Co. A/c ‘Advertisement A/c To Bank Alc (Payment of advertisement made by cheque) Office Equipment A/c To Universal Typewriter Co. (Purchased one typewriter on credit) _ _ Bedi & Co. Alc To Sales Account Drawings A/c To Bank A/c | (amount withdrawn for personal use) __ = Cash Alc Dr. To Sales A/c (Goods soldforcash) Cash Alc Ps Discount Allowed A/c To Bedi & Co. A/c | (cash received and discount alowed) ————~p, Bank A/c To Cash Alc (Cash deposited) 5,000 900 4,000 1,700 1,000 100 750 2,900 350 650 2,850 50 2,500 5,000 900 4,000 1,700 400 1,000 100 2,900 350 650 2,900 2,500Rent Ac To Bank Ale (Cheque paid tor rent) Salaries Alc To Cash Ale (Salaries paid) Bir & Co. Ale To Cash Ae To Discount Received A/c (Cash paid in full settlement) Grand Total Ledger CASH ACCOUNT 1,000 10,000 1,700 2021 Jan. By Bank A/c Furniture A/c Purchases A/c Telephone Rent A/c Bank Alc Balance o/d ACCOUNT 2021 jan. 10 Jan. 14 cist 31 By By Balance cid Advertisement Alc Drawings Rent Alc FURNITURE ACCOUNT T 2021 dan. 3] By Balance cidDISCOUNT ALLOWED ACCOUNT z 2021 z van.31] By Balance old 50 TELEPHONE RENT ACCOUNT 2 | 2021 - dan. 31] By Balance cid 400 ADVERTISEMENT ACCOUNT z 2021 zt 100 | Jan. 31] By Balance cid 100 To Balance bid 100 DISCOUNT RECEIVED ACCOUNT z 2021 zt To Balance cid 50 | Jan. 31| By Bir & Co 50 Feb. 1] By Balance bid 50 SALES ACCOUNT To Balance bid zt 2021 ? To Balance cid 5,250 | Jan. 5} By Cash * 12| By Bedi & Co " 16] By Cash 5,250 Feb. 1| By Balance b/d PURCHASES ACCOUNT z 2021 x 4] To Cash Ac Jan.31 | By Bala 5,000 " 8/" Bir & Co. 2021 Jan. 8 By Purchases Alc MENT ACCOUNTUNIVERSAL TYPEWRITER CO. 2021 z 2021 Jan. 31] To Balance cid 750 | Jan.11 |By Office Equipment A/c Feb. 1 | By Balance b/d BEDI & CO. z= (| 2021 : 2 Sales A/c 2,900] Jan. 25| By Cash A/c o Li 25|° Discount Allowed ‘ |_2,900 5 = 6 DRAWINGS ACCOUNT 1 [202 z | 2021 ; 8 Jan. 14] To Bank 350] Jan. 31] By Balance cid 350 Feb. 1| To Balance bid | 350 350 ; RENT ACCOUNT 2021 z 2021 5 lan. 31 | To Bank 300| Jan. 31| By Balance c/d 300 Feb. 1| To Balance bid 300 SALARIES ACCOUNT | 2021 z Jan. 31] To Cash A/c __600 By Balance c/d 600 15 Feb. 1] To Balance bid ~ 600 16 7 TRIAL BALANCE as on 31st January, 2021 Or. cr. ___Name of the Account Amount _| Amount Cash Account 850 Capital Account 10,000 Bank Account 6,750 Furniture Account 900 Telephone Rent Account 400 Advertisement Account 100 Sales Account 5,250 Purchases 5,000 Office Equipment Account 750 Universal Typewriter Co. 750) Drawings Account 350 Rent Account 300 Salaries Account 600 Discount Allowed Account 50 Discount Received Account Spe) Ri teed 50 Total 16,050 16,050i 50 00 00 o | s > ae 0 0 0 0 i 10. ML. 2 13. Ma 15. 16. 1. 18, QUESTIONS (BBM, Bangalore, 2006) What is a Ledger? ‘What is meant by posting ? What is Trial Balance ? fate the two objectives of Trial Balance Name the various methods of preparing Trial Balance? tate the two limitations of Trial Balance ? What are the kinds of accounts according to double entry system? (BBM, Bangalore) What is Ledger Account ? Why is it prepared ? (BBM, Bangalore Dec. 2007) What is meant by balancing of account ? Mention the main objects of balancing (BBM, Bangalore) Differentiate between a journal and ledger. (BBM, Bangalore) What do you mean by Trial Balance ? Why is it prepared? (BBM, Bangalore Dec. 2009) OR Mention two objectives of tris : (BBM, Bangalore, 2006) What is error of principle ? Give any two example (BBM, Bangalore) (BBM, Bangalore) (BBM, Bangalore) (BBM, Bangalore) (BBM, Bangalore) (BBM, Bangalore) (BBM, Bangalore) Explain error of a commission with an example State the errors disclosed and undisclosed by a Trial Balance What are the various kinds of errors Name the errors not disclosed by Trial Bala What is compensating errors ? What are errors of omission ? Beare aad Define a Ledger. Why is it known as the prineipal book of accounts ? Also What do you mean by posting ? How is posting made from the Journal in the Ledger ? Explain with suitable examples. What do you mean by ‘Trial Balance ? Discuss the mi of preparing a Trial Balance. bes 1 en writ ance a conclusive proof of the accuracy of a book: Kee {Teh agreement of Trial Balas lected by te Trial Blancs? Explain the errors which are disclosed by the Trial Balance. Incase of disagreement of the Trial Bal to locate the errors ? What is the prineipal book of accounts empl MES this book and how many different classes of accounts Of found in i lance do not agree how would you Ihe ttl of bit and eet colnet TAG sof Trl alan ee proceed to yur errors of a ng has been correctly amount, is this a conclusive proof that the whole of the book-keeping accomplished ? «pom, Bangalore, 2008) State any five differences between journal and ledger: give its ruling ain objects, limitations and methods per? If Jance, in what order you would follow the procedure 2 What are the functions of loyed by the traders8. Following Trial Balance of Durlabh Si bei ted Pollowing Trial Ba D Singh is being presented to you. It need TRIAL BALANCE (As on June 30, 2021) cae (1-7-2020) 8,950 . wings Stock (1-7-2020) 3,725 Mt Purchases 23,100 Sales 39, Wages and Salaries 6,205 a Lighting and Heating 310 Equipment 3,600 Carriage Outward Y Carriage Inward 105 . Returns Outrward Provision for Bad Debts 350 Discount Allowed Rent, Rates & Insurance 1,116 Motor Vehicles 1,475 Cash in hand 110 Sundry Creditors 4,925 Sundry Debtors 13,99 Bank Overdraft 975 Ans. [Correct TB. Total 9. Following Trial Balance has been prepared wrongly. You are asked to prepare the Trid Balance correctly. 260 ; Suspense A/c (Cr.) Heads of Accounts Dr. Balance Cr. Balance z t Capital 22,000 Stock 10,000 Debtors 8,000 Creditors 12,000 Machinery 20,000 Cash in hand 2,000 Bank Overdraft 14,000 Sales Returns 8,000 Purchases Returns 4,000 i nses 12,000 Purchases 26,000 Wages 10,000 00 Balaries ee Prepaid Insurance Bills Payable Outstanding Salaries i ie Ans. [Correc\ T.B. Total 7 1,08,200].3,000 _~ Nak TRIAL BALANCE ee 527 | per submitted to you the foll book-keeper sul ye lowing Trial Balance, whic Aim Rewrite the Trial Balance, correcting the mlstahes ooo ae has not been ab eee nitted by him, Dr. oF le to Capital 15,000 wings Bock (1-1-2021) Inwards iage Inwards it with Anand Gupta Outwards Carriage Outwards [oan to Ashok @ 5% given on 1-1-2021 725 Interest on the above 1,000 Rent Rent Outstanding 820 Stock (31-12-2021) 130 Purchases 18,792 Debtors [ Goodwill Creditors 73 Advertisement Expenses 3,000 Provision for Doubtful Debts aos Bad Debts Patents and Patterns Cash Sales Discount allowed Wages 1,200 . [Correct T.B. Total 7 48,109). . Mitesh starts business on Ist January 2021 in th urcha with % 20,000 cash, 7 10,000 stock and @ 1,000 furniture. ( ¥ 10,000 and ¥ 5,000 respectively. Total sales and purchas ® 50,000 respectively. Outstanding creditors were 7 15,000 end of the year 2021. Salaries amounted to 7 6,000. Rent and Taxes 7 2,000. Other expenses % 3,000. Drawings 7 6,000. Machinery was purchased for 2 10,000 out of which © 8,000 has been paid. Prepare Trial Balance as on 31st December 2021 from the above transactions. {Total of Trial Balance @ 1,16,000]. Hint. Cash Balance 7 3,000, Received from Debtors From the following Trial Balance containing obvious errors, prepare correct Trial Balance z id debtors 7 25,000 a: ,000, Paid to Creditors % 32,000. Cost of Goods Sold 1,50,000 - Closing Stock = 40,000 Debtors : - nace Creditors ane fed Fixed Assets z 60,000 = Opening Stock a es 20,000 Expenses — — 2,00,000 Sales - 0000) = Capital 350,000 350,000 {Total of Trial Balance 7 3,20,000)- Hint Calculate Purchases ic. 1,30,000ge LEDGER AND TRIAL = Big) as 3 large boot and shoe repairing 02: the Trial Balance of a oe repairing compe, 13. pe otal of the debit side oF 65 590 alantmat ofthe eredit side is € 42,470 Mar as at 3ist December, : fe g mistakes are dist ex : «the following mistakes are discovered ‘After several checkings and recheckin ae Caprect Figure igure as it appears Name of Accounts as it should in the Trial Balance 14,900 14,800 Opening Stock 61,780 61,780 vette But appear on the debi 2,160 400 Rent & Rates on 900 Sundry Debtors . Ascertain the correct total of the Trial Balance. ‘Ans. ( 1,04,4201. Jou Hint. In case of a shoe repairing company, repair is an income, So it will appear on th jo (To credit side of the Trial Balance. 16. Jou JOURNAL LEDGER AND TRIAL BALANCE E : TA. Journolise the following transactions, post them into Ledger and prepare a Trial Balans a year Jur September 1 Started business with & 50,000, paid into Bank ¢ 20,000 1 2 Bought furniture for % 5,000 and Machinery for & 10,000. 1 3 Purchased goods for 7 14,000. e 6 Sold goods for ¥ 8,000. S 8 Purhased goods from Malhotra & Co. % 11,000. 5 10 Paid telephone rent for the year by cheque € 500. iB \ 11 Bought one typewriter for @ 2,100 from Universal Typewriter Co. on ered 8 15 Sold goods to Keshav Ram for € 12,000. ie 17 Sold goods to Rajesh Kumar for ® 2,000 for cash. 15 19 Amount withdrawn from bank for personal use © 1,500. a 20 Withdrew from bank for business use € 3,500. 21 Received cash from Keshav Ram % 11,900, discount allowed 7 100. 22 Paid into bank ? 5,800, i 28 ‘Bought 0 shares in XY and Co.Ltd. at ¢ 60 per share, brokerage paid © i Roker 1,000 found defective were returned to Malhotra & Co. I the balance of the amount due to them was settled by issuing a ched™é 28, Sold 20 shares of XY and Co. Ltd e20 "0. Ltd. at € 65 per share, brokerage paid © 20 28 Bought goods worth a ere Boneh s rth € 2,100 from Ramesh and supplied them to Suresh ® 30 Suresh returned goods worth ¥ 100, which in turn were sent to Rames 30 Issued a cheque for € 1,000 in favour of the landlord for rent for Septem, 30 Paid salaries to staff 1,500 and received fi ol for goods sold by him, after deducting hs eravelhen eoeaes @ 100. e s travelling expenses © 1 Paid for : Charity © 101; Stationery ® 450 ; Postage ? 249. [Journal Total ® 1,83,370 ; T-B. Total € 82,300). i ee ae ‘On 1st March 2021 the books of account of Mr. A disclosed the fol i 1 following position Cash in hand € 1,300; Bank overdraft © 1,000; Debtor— I % 38,600; Premises % 1,50,000; Sundry creditors 15. ie Basu ¢ 3,500; Furnit! J. Ram % 9,600; W. John ® 10,600.— 15-39 juring the month BI 3 Sold on credit goods to G. Baru in 10 bags for ¢ 1.600 per bag. The bags were hon-returnable and as such % 20 per bag was extra charged. W. John was paid his dues by cheque, allowed ¥ 100 discount 40. Paid wages in cash 7 500. {4 Bought on credit from J. Ram goods for © discount 7 500. 21 Cash sales to date amounted to? 1 exception of @ 300 which was retained for 24 G. Basu returned goods as damaged. Agre same. 26 Mr. A brought in € 10,000 as additional capital and paid the same iato bank 27. Received from a sub-tenant 7 500 for premises sublet 29 G. Basu paid % 3,000 on account. Paid the same into Bank. 31 Paid in cash electric light bill = 120. ournslise the above transactions, post them into ledger and prepare a Trial Balance 500. J. Ram allowed trade ). Paid the ai 3 office use ed to allow him credit of € 300 for jount into bank with the Ppear ent! ans, (Total of Journal ® 2,62,420, Trial Balance Total ® 2,35,050] ié Journalise the following transactions in the books of Hitesh, post them into Ledger and a prepare a Trial Balance. ial Bala 2021 2021 Sune t June z 1 Started business with cash 90,000 21 Withdrew from bank for 1 Paid into bank 50,000 _private use 2,000 2 Goods purchased for cash 30,000 21 Withdrew from bank for use in 3 Purchase of furniture and the business 10,000 payment by cheque 10,000 25 Paid telephone rent for one year 800 5 Sold goods for cash 12,000 28 Cash paid to Amrit Lal in full oncelt | 8 Sold goods to Arvind 8,000 settlement of his account 11,800 - 10 Goods purchased from Amrit Lal 14,000 30 Paid for: Stationery 400 12 Goods returned to Amrit Lal 2,000 Rent 2,000 15 Sold goods to Ram for Cash 5,000 Salaries to staff 5,000 18 Cash received from Arvind thee! (5 © 7,920 and discount allowed tohim 80 100. journal Total ? 2,61,200; Trial Balance Total © 1,17,120).