what is trial balance class 11

what is trial balance class 11

Meaning And Definition of Trial Balance
Various accounts are opened in the ledger and after recording the journal entries in it, their ‘balance’ or ‘balance’ is worked out. For the purpose of ascertaining the mathematical correctness of the accounts, ‘Trial Balance’ is prepared. Trial Balance is also called ‘Examination List’.

“A Trial Balance is a Summary of Ledger”. It is the list in which balances of all the accounts of a ledger and cash book are kept. It is considered when the sum of the amounts of debit side and credit side are equal. That the accounts are mathematically correct. In short, the reconciliation of trial balance is regarded as proof of the mathematical correctness of the books of account. It is created on a certain date.

Following are some of the major definitions of ‘Trial Balance

According of William Pickles — “Trial Balance accounts opened in the ledger at the end of the financial year or on any other date is the list of balances that is made to check whether the debit total is in fact the same as the credit total.’ ,

According to Spicer & Pegler — ” When at a given Date all the postings are complete (that is, the double entries of all the transactions are Complete), a schedule of the Balances is Prepared. This schedule is called the Trial Balance”

According to Carter — ” Trial Balance is a Statement of Debit and Credit balances derived from Ledger, including balances of Cash And Bank taken from Cash Book”

Ideal definition – “Balance is the list of debit and credit totals or account balances of various accounts of the ledger which is made for the purpose of ascertaining the arithmetical accuracy of the account on a certain date.”

1. whatistrialbalanceclass11
MeaningAndDefinitionofTrialBalance
Variousaccountsareopenedintheledgerandafterrecordingthejournalentriesinit,their
‘balance’or‘balance’isworkedout.Forthepurposeofascertainingthemathematical
correctnessoftheaccounts,‘TrialBalance’isprepared.TrialBalanceisalsocalled
‘ExaminationList’.
“ATrialBalanceisaSummaryofLedger”.Itisthelistinwhichbalancesofalltheaccounts
ofaledgerandcashbookarekept.Itisconsideredwhenthesumoftheamountsofdebit
sideandcreditsideareequal.Thattheaccountsaremathematicallycorrect.Inshort,the
reconciliationoftrialbalanceisregardedasproofofthemathematicalcorrectnessofthe
booksofaccount.Itiscreatedonacertaindate.
Followingaresomeofthemajordefinitionsof‘TrialBalance
AccordingtoWilliamPickles—“TrialBalanceaccountsopenedintheledgerattheendof
thefinancialyearoronanyotherdateisthelistofbalancesthatismadetocheckwhether
thedebittotalisinfactthesameasthecredittotal.’,
AccordingtoSpicer&Pegler—”WhenatagivenDateallthepostingsarecomplete(that
is,thedoubleentriesofallthetransactionsareComplete),ascheduleoftheBalancesis
Prepared.ThisscheduleiscalledtheTrialBalance”
AccordingtoCarter—”TrialBalanceisaStatementofDebitandCreditbalancesderived
fromLedger,includingbalancesofCashAndBanktakenfromCashBook”
Idealdefinition–“Balanceisthelistofdebitandcredittotalsoraccountbalancesofvarious
accountsoftheledgerwhichismadeforthepurposeofascertainingthearithmetical
accuracyoftheaccountonacertaindate.”
MainFeaturesofTrialBalance
(1)Itshowsthedebitandcredittotalsoftheledgeraccountsorthebalancesofthe
accounts.

2. (2)Itispreparedonacertaindate.
(3)Itspurposeistoascertainthearithmeticalaccuracyofthebalancesoftheaccounts.
(4)Itisgenerallymadeattheendoftheyear.
(5)Thisisaspecialtypeoflist.
(6)Ifthetotalsofthedebitandcreditsidesofthebalancesheetareequal,thengenerally
theentriesareconsideredtobemathematicallycorrectandiftheirtotalsarenotequal,then
itisunderstoodthatthereissomemathematicalerrorinthem.
(7)Finalaccountsarepreparedfromtrialbalance.
(8)Itispreparedonaseparateplainpaper.
(9)Itdulyandfactuallypresentsallourarticles.
ObjectivesofPreparingATrialBalance
Thequestionarisesastowhytrialbalanceisprepared.Infact,itisnotmandatorytomakea
trialbalance,butsinceitspreparationservesmanypurposes,itispreparedbyalmostall
businessmenandbusinessorganisations.Inbrief,trialrunhasthefollowingobjectives:
(1)Informationaboutthearithmeticalaccuracyoftheaccounts–Themainpurposeof
preparingtrialbalanceistoobtaininformationabouttheaccuracyoftheaccountsopenedin
theledger,especiallythearithmeticalaccuracy.
(2)TohelpinlocatingErrors–Bymakingtrialbalance,ithelpstofindouttheerrorsinthe
totalofthesubsidiarybooks,theerrorsrelatedtotheentriesintheledgerandtheerrorsin
thecalculationofthebalanceoftheaccounts.Is.
(3)Topreparethefinalaccountsi.e.details–everybusinessmanwantstoget
informationabouttheprofit-lossandfinancialconditionofhisbusiness.Trialbalanceis
preparedforthispurpose.TradingAccount,Profit&LossAccountandBalanceSheetcan
beeasilypreparedfromthetrialbalance.
(4)Knowingthebalanceofaparticularaccount–Thebalanceofanyaccountofthe
ledgercanbeknowneasily.
IsTrialBalanceaLedgerAccount
•Balancesheetisnotaledgeraccount.Itisonlyastatementwhichispreparedtocheckthe
arithmeticalaccuracyoftheentriesmadefromthejournaltotheledger.
•Trialbalanceispreparedfromthebalancesorbalancesofvariousaccountsoftheledger,
buttheledgerispreparedfromtheentriesofthejournalandcashbook.

3. •Thetitleoftrialbalancementionsthedateonwhichitispreparedbutthetitleofthe
accountintheledgerNameremains,suchasbuildingaccount,salaryaccountetc.
PreparationofTrialBalance
TherearethreemethodsofpreparingTrialBalance:
(1)TotalMethod
(2)BalanceMethod
(3)Total–Cum–BalanceMethods
Outofthesethree,thesecondmethodi.e.remainingmethodisthemostprevalentandthe
bestmethod.
(1)TotalMethod—Inthismethod,trialbalanceispreparedfromthetotalsofboththesides
ofeachaccountoftheledger.Inthismethod,therearefourfieldsinthebalancesheet–in
thefirstfield‘headofaccounts’iswritten.The‘pagenumberoftheledger’iswritteninthe
secondbox,thedebittotalsofeachaccountarewritteninthethirdboxandthecredittotals
ofalltheaccountsarewritteninthefourthbox.Finally,thegrandtotalofthetotalsonthe
debitandcreditsidesiscalculated.Nowthismethodisnotwidelyused.
Remember–Tousethismethod,addtheamountsofdebitsideandcreditsideofeach
accountoftheledger,donotremovetheirbalanceatall.
(2)BalanceMethod—Underthismethodthedebitbalanceorcreditbalanceofeach
accountiswritten.Inthismethodalsotherearefourcolumnsoftrialbalance-(i)columnfor
titleofaccounts,(ii)columnforpagenumberofledger,(iii)columnfordebitbalance,and(iv)
columnforcreditbalance.Inthismethodtheaccountswhichdonothaveanybalanceare
notshowninthetrialbalance.Finally,thetotalsofthedebitandcreditbalancesareworked
outseparately.Inpractice,thismethodofmakingtrialbalanceisused.
SpecimenofatrialBalance
TrialBalanceof……..

4. S.No HeadofAccount L.
F
Dr.Amount
₹
Cr.Amount
₹
Assets,Expenses&Losses………..
Capital,Liabilities,Income&
Profit
…………
GrandTotal ………. ………..
AccountingTreatmentofClosingStockinTrialBalance
•Normallyclosingstockisnotshownintrialbalanceasnoseparateaccountisopenedforit
inthegeneralledger.
•Theclosingstockisshownasanadjustmentbelowthetrialbalance.
•Yes,ifanadjustmententryhasalreadybeenmadeinrespectofclosingstock,thenclosing
stockwillbeshownonthedebitsideofthetrialbalBalance
AccountingTreatmentofOpeningStockinTrialBalance
•Theopeningstockisshowninthedebitsideofthebalancesheet.
•Ifthecostofgoodssoldisshowninthetrialbalanceandboth‘openingstock’and‘closing
stock’areshown,then
(i)ThecostofgoodssoldieCostofGoodsSoldwillbeshowninthedebitaccountoftrial
balance.
(ii)‘ClosingStock’i.e.willbeshowninthedebitcolumnoftrialbalance,but
(iii)Openingstockwillnotbeshowninthetrialbalance.
Remember
•OpeningStocki.e.OpeningStockisshowninthedebitcolumnoftrialbalance.Closing
StockisnotshownintrialbalancebecausethereisnoseparateaccountforitinJournal
Ledger.isopened.
•SalesReturnsorReturnsInwardareshownintheDebitcolumnoftheBalanceSheet.
•PurchasesReturnsorReturnsOutwardareshowninthecreditcolumnofthetrialbalance.
•CarriageorPurchasesorCarriageInwardandCarriageonSalesorCarriageOutwardboth
areshowninthedebitcolumnofBalanceSheet

5. (3)Totals–Cum–BalanceMethod—Thismethodisamixedformofadditionmethod
andremaindermethod.Underthismethod,fourboxesaremadefortheamount.Twocells
arethereforwritingthetotalsofdebitandcreditbalancesofdifferentaccountsandtwocells
arethereforwritingdebitandcreditbalancesofdifferentaccounts.Thissystemisalsonotin
practice.
UsesofTrialBalance
1.Itchecksthearithmeticalcorrectnessofthebooks.
2.Ifthebalancesheetmatches,thenitcanbeassumedthatthebooksarecorrect.
3.Availabilityoftrialbalancehelpsinpreparationoffinancialstatementsorfinalaccounts.
actuallytrialbalance,forfinalaccountActsasabaseorexchange.
LimitationsofTrialBalance
1.Reconciliationoftrialbalanceisnotthefinalproofofthecorrectnessofthebooksof
accounts.
2.Itisakindofcontroloverthebooks,itcannotproveanything.
3.Itisnotapartofthebooks,itisgenerallypreparedonaseparatesheetofpaper.
Fromthefollowingbalances,preparesTrialBalanceason31March,2017incorrect
Andproperform:
Purchases₹10,250
Sales₹25,800
OpeningStock₹3,800
Wages₹2,600

6. Salaries₹3,400
PurchasesReturns₹2,350
Capital₹40,000
Insurance₹1,200
Tex&Rent₹2,400
Creditors₹6,700
Commission(Cr).₹500
Buildings₹10,000
Debtors₹5,800
BillReceivable₹4,000
Machinery₹15,000
Furniture₹4,500
InterestonInvestment₹1,200
Investment₹15,000
SalesReturns₹850
DiscountReceived₹2,200
Solution:
TrialBalanceof…….
Seethetableonarticle
PointstobeconsideredwhilepreparingTrialBalance
(1)Theaccountsoftheledgerhavingdebitbalancearewrittenonthedebitsideofthetrial
balanceandtheaccountshavingcreditbalancearewrittenonthecreditsideofthetrial
balance.
(2)Allassets,liabilities,expensesorexpensesandlossesaccountshavedebitbalances,
whilecapital,liabilities,creditors,incomeandprofitaccountshavecreditbalances.
IsaTrialBalanceConclusiveproofoftheAccuracyofAccounts

7. ThemainpurposeofpreparingTrialBalanceistocheckthemathematicalcorrectnessofthe
accounts.Generally,ifthetotalsofboththesidesofthetrialbalance(i.e.debitandcredit
sides)match,thenitisunderstoodthattheaccountingofboththesidesiscompleteand
thereisnoarithmeticalerror,butthequestionariseswhetherthetotalsofboththesidesof
thetrialbalancematchIsitaconclusiveproofofthecorrectnessoftheaccounts?
Theanswertothisquestionisthatonlymathematicalaccuracycanbeknownfromthe
receiptofTrialBalance,itcannotbeconsideredasproofofcompletecorrectnessofthe
accounts.IthasbeenseenmanytimesthatTrialBalanceSoitisfoundbutthereareerrors
inthebooks.
Infact,someerrorsorinaccuraciesaresuchthattheydonotaffectthereconciliationoftrial
balance.Asaresult,reconciliationoftrialbalanceisnotaconclusiveproofofcorrectnessof
accounts.Therefore,itisnecessarytoconsiderthoseinaccuracies.Evenwhileliving,one
getsthebottomline.
FrequentlyAskedQuestions
Qs1.Whatistheformulaforthetrialbalance?
Ans.TheformulaforthetrialBalanceistotaldebits=totalcredits
Qs2.Whatisthetrialbalanceclass11answerinasimplesentence?
Ans.ABookkeepingworksheetinWhichthebalanceofallledgersareCompiledintodebit
andCreditaccountColumntotalsthatareequal.
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