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C hapter 7: The trial balance

Contents of chapter
This chapter shows how trial balances are drawn up to check the accuracy of entries in the accounts and identify
errors in the books.

Notes for teachers


Students should know that a trial balance is not part of the double entry system.
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The steps for preparing a trial balance are shown on p. 60.


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When a trial balance does not balance, it may be due to any of the following factors:
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(i) The balance has been shown on the wrong side of the trial balance. In this case, the difference in
the trial balance will be twice the amount of the balance entered wrongly.
(ii) A transaction has only been entered once, i.e. double entry is not completed. Compare the trial
balance difference against the amounts of the transactions. Same figure for a transaction will give a
clue as to the error.
(iii) An incorrect amount has been calculated as the balance. Additions will have to be checked.
(iv) Other incorrect additions have been made. All additions will have to be checked.
(v) A transaction has been entered on the debit side as one figure and a different figure on the credit
side. Only detailed checking will find this error.

There is no point at this stage in looking at details of all the possible kinds of errors that can be made and
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yet the trial balance still ‘balances’. This is dealt with in Chapters 25 and 26.

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Answers to MCQs and exercises
7.1 C 7.2 D 7.3 C 7.4 C 7.5 D

7.6
Capital M Goh
$ $ $ $
(31) Balance c/f 250 (1) Cash 250 (12) Bank 25 (2) Purchases 25

Cash M Bei
$ $ $ $
(1) Capital 250 (6) Rent 12 (31) Balance c/f 186 (2) Purchases 76
(15) Carriage 23 (18) Purchases 110
(31) Balance c/f 215 186 186
250 250
L Lo
Bank $ $
$ $ (31) Balance c/f 64 (2) Purchases 64
(9) Better Modes 43 (12) M Goh 25
(10) K Shun 150 (12) Elite Co 54
Better Modes
(31) Rent 18
(31) Balance c/f 96 $ $
(4) Sales 43 (9) Bank 43
193 193

C Hung
Purchases
$ $
$ $
(4) Sales 62 (31) Balance c/f 129
(2) Elite Co 54 (31) Balance c/f 459
(21) Sales 67
(2) K Ma 87
(2) M Goh 25 129 129
(2) M Bei 76
(2) L Lo 64 K Shun
(18) K Ma 43
$ $
(18) M Bei 110
(4) Sales 176 (10) Bank 150
459 459 (31) Balance c/f 26
176 176
Sales
$ $ Rent
(31) Balance c/f 348 (4) Better Modes 43
$ $
(4) C Hung 62
(6) Cash 12 (31) Balance c/f 30
(4) K Shun 176
(31) Bank 18
(21) C Hung 67
30 30
348 348

Carriage
Elite Co
$ $
$ $
(15) Cash 23 (31) Balance c/f 23
(12) Bank 54 (2) Purchases 54

K Ma
$ $
(31) Balance c/f 130 (2) Purchases 87
(18) Purchases 43
130 130

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Trial Balance as at 31 May 20X6
Dr Cr
$ $
Capital 250
Cash 215
Bank 96
Purchases 459
Sales 348
K Ma 130
M Bei 186
L Lo 64
C Hung 129
K Shun 26
Rent 30
Carriage 23
978 978

7.7
Capital Sales
$ $ $ $
(31) Balance c/f 800 (1) Bank 800 (31) Balance c/f 291 (5) Cash 87
(7) Ever Lasting Ltd 35
(7) L Lee 42
Bank
(7) Cathay Ltd 72
$ $ (13) L Lee 32
(1) Capital 800 (17) L Hang 84 (13) Cathay Ltd 23
(24) Cathay Ltd 95 (21) Betta Ltd 50
291 291
(31) Van 400
(31) Balance c/f 361
895 895 Returns Outwards
$ $
(31) Balance c/f 44 (18) Best Wear 20
Cash
(27) K Ho 24
$ $
44 44
(5) Sales 87 (6) Wages 14
(30) Loan from J King 60 (9) Purchases 46
(12) Wages 14 K Ho
(31) Balance c/f 73 $ $
147 147 (27) Returns outwards 24 (2) Purchases 76
(31) Balance c/f 52
Purchases 76 76
$ $
(2) K Ho 76 (31) Balance c/f 360 L Hang
(2) L Hang 27 $ $
(2) Best Wear 56 (17) Bank 84 (2) Purchases 27
(9) Cash 46 (10) Purchases 57
(10) L Hang 57
84 84
(10) Best Wear 98
360 360
Best Wear
$ $
(18) Returns outwards 20 (2) Purchases 56
(31) Balance c/f 134 (10) Purchases 98
154 154

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Wages Loan from J King
$ $ $ $
(6) Cash 14 (31) Balance c/f 28 (31) Balance c/f 60 (30) Cash 60
(12) Cash 14
28 28 Van
$ $
Ever Lasting Ltd (31) Bank 400 (31) Balance c/f 400
$ $
(7) Sales 35 (31) Balance c/f 35 Trial Balance as at 31 March 20X6
Dr Cr
L Lee $ $
$ $ Capital 800
(7) Sales 42 (31) Balance c/f 74 Bank 361
(13) Sales 32 Cash 73
74 74 Purchases 360
Sales 291
Returns outwards 44
Cathay Ltd K Ho 52
$ $ Best Wear 134
(7) Sales 72 (24) Bank 95 Wages 28
(13) Sales 23 Ever Lasting Ltd 35
95 95 L Lee 74
Shop fixtures 50
Loan from J King 60
Shop Fixtures
Van 400
$ $ 1,381 1,381
(15) Betta Ltd 50 (31) Balance c/f 50

Betta Ltd
$ $
(21) Bank 50 (15) Shop fixtures 50

7.8X
Capital Purchases
20X6 $ 20X6 $ 20X6 $ 20X6 $
May 31 Balance c/f 12,000 May 1 Cash 12,000 May 2 Bargains Ltd 400 May 31 Balance c/f 1,940
" 2 R Chu 250
" 2 K Mei 380
Cash
" 2 A Lo 290
20X6 $ 20X6 $ " 10 R Chu 340
May 1 Capital 12,000 May 2 Bank 7,500 " 10 Sun Ltd 280
" 5 Sales 350 " 15 Office stationery 60
1,940 1,940
" 17 Wages 1,000
" 29 Drawings 200
" 31 Telephone Bargains Ltd
expenses 80 20X6 $ 20X6 $
" 31 Balance c/f 3,510 May 16 Bank 400 May 2 Purchases 400
12,350 12,350

R Chu
Bank
20X6 $ 20X6 $
20X6 $ 20X6 $ May 31 Balance c/f 590 May 2 Purchases 250
May 2 Cash 7,500 May 3 Office fixture 185 " 10 Purchases 340
" 24 Glamour Ltd 300 " 7 Rent 2,500
590 590
" 24 A Wu 200 " 16 Design Ltd 500
" 16 Bargains Ltd 400
" 31 Balance c/f 4,415
8,000 8,000

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K Mei Design Ltd
20X6 $ 20X6 $ 20X6 $ 20X6 $
May 20 Returns outwards 60 May 2 Purchases 380 May 16 Bank 500 May 14 Office fixture 500
" 31 Balance c/f 320
380 380 Office Stationery
20X6 $ 20X6 $
A Lo May 15 Cash 60 May 31 Balance c/f 60
20X6 $ 20X6 $
May 20 Returns outwards 50 May 2 Purchases 290 Wages
" 31 Balance c/f 240
20X6 $ 20X6 $
290 290 May 17 Cash 1,000 May 31 Balance c/f 1,000

Office Fixture Returns Outwards


20X6 $ 20X6 $ 20X6 $ 20X6 $
May 3 Bank 185 May 31 Balance c/f 685 May 31 Balance c/f 110 May 20 K Mei 60
" 14 Design Ltd 500 " 20 A Lo 50
685 685 110 110

Sales Drawings
20X6 $ 20X6 $ 20X6 $ 20X6 $
May 31 Balance c/f 1,690 May 5 Cash 350 May 29 Cash 200 May 31 Balance c/f 200
" 6 Glamour Ltd 340
" 6 R Tse 200
" 6 A Wu 450 Telephone Expenses
" 13 Glamour Ltd 200 20X6 $ 20X6 $
" 13 R Tse 150 May 31 Cash 80 May 31 Balance c/f 80
1,690 1,690
F Kwok
Glamour Ltd Trial Balance as at 31 May 20X6
20X6 $ 20X6 $ Dr Cr
May 6 Sales 340 May 24 Bank 300 $ $
" 13 Sales 200 " 31 Balance c/f 240 Capital 12,000
540 540 Cash 3,510
Bank 4,415
Purchases 1,940
R Tse Creditors: R Chu 590
20X6 $ 20X6 $ K Mei 320
May 6 Sales 200 May 31 Balance c/f 350 A Lo 240
" 13 Sales 150 Sun Ltd 280
350 350 Office fixture 685
Sales 1,690
Debtors: Glamour Ltd 240
A Wu R Tse 350
20X6 $ 20X6 $ A Wu 250
May 6 Sales 450 May 24 Bank 200 Rent 2,500
" 31 Balance c/f 250 Office stationery 60
450 450 Wages 1,000
Returns outwards 110
Drawings 200
Rent Telephone expenses 80
20X6 $ 20X6 $ 15,230 15,230
May 7 Bank 2,500 May 31 Balance c/f 2,500

Sun Ltd
20X6 $ 20X6 $
May 31 Balance c/f 280 May 10 Purchases 280

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7.9
Capital Returns Inwards
$ $ $ $
(30) Balance c/f 650 (1) Bank 600 (19) New City Ltd 11 (30) Balance c/f 11
(1) Cash 50
650 650
Jubilee Ltd
$ $
Bank (13) Returns outwards 25 (2) Purchases 500
$ $ (28) Returns outwards 42 (11) Purchases 240
(1) Capital 600 (5) Van 256 (30) Balance c/f 673
(25) P Pak 43 (7) Motor expenses 12 740 740
(21) K Moon 62
(21) T Hui 46
(30) Balance c/f 267 H Hang
643 643 $ $
(3) Sales 66 (23) Cash 66

Cash
New City Ltd
$ $
(1) Capital 50 (4) Purchases 23 $ $
(23) H Hang 66 (15) Motor expenses 5 (3) Sales 25 (19) Returns inwards 11
(26) Sales 34 (20) Drawings 10 (30) Sales 43 (30) Balance c/f 57
(27) Drawings 24 68 68
(29) Postage 4
(30) Balance c/f 84 P Pak
150 150
$ $
(3) Sales 43 (25) Bank 43
Purchases
$ $ Van
(2) Jubilee Ltd 500 (30) Balance c/f 871
$ $
(4) Cash 23
(5) Bank 256 (30) Balance c/f 256
(11) Jubilee Ltd 240
(11) K Moon 62
(11) T Hui 46 Motor Expenses
871 871 $ $
(7) Bank 12 (30) Balance c/f 17
(15) Cash 5
Sales
17 17
$ $
(30) Balance c/f 438 (3) H Hang 66
(3) New City Ltd 25 Broadwater Ltd
(3) P Pak 43 $ $
(9) Broadwater Ltd 24 (9) Sales 24 (30) Balance c/f 24
(9) K Luen 26
(9) M Ma 65
(26) Cash 34 K Luen
(30) New City Ltd 43 $ $
(30) Evergreen Ltd 67 (9) Sales 26 (30) Balance c/f 71
(30) K Luen 45 (30) Sales 45
438 438 71 71

Returns Outwards M Ma
$ $ $ $
(30) Balance c/f 67 (13) Jubilee Ltd 25 (9) Sales 65 (30) Balance c/f 65
(28) Jubilee Ltd 42
67 67

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K Moon Trial Balance as at 30 June 20X8
$ $ Dr Cr
(21) Bank 62 (11) Purchases 62 $ $
Capital 650
Bank 267
T Hui
Cash 84
$ $ Purchases 871
(21) Bank 46 (11) Purchases 46 Sales 438
Returns outwards 67
Drawings Returns inwards 11
Jubilee Ltd 673
$ $
New City Ltd 57
(20) Cash 10 (30) Balance c/f 34
Van 256
(27) Cash 24
Motor expenses 17
34 34 Broadwater Ltd 24
K Luen 71
Postage M Ma 65
$ $ Drawings 34
(29) Cash 4 (30) Balance c/f 4 Postage 4
Evergreen Ltd 67
1,828 1,828
Evergreen Ltd
$ $
(30) Sales 67 (30) Balance c/f 67

7.10X
Capital T Hip
20X5 $ 20X5 $ 20X5 $ 20X5 $
Nov 30 Balance c/f 5,300 Nov 1 Bank 5,000 Nov 18 Returns outwards 14 Nov 3 Purchases 160
" 30 Bank 300 " 23 Bank 146
5,300 5,300 160 160

Bank K Sun

20X5 $ 20X5 $ 20X5 $ 20X5 $


Nov 1 Capital 5,000 Nov 6 Rent 20 Nov 23 Bank 230 Nov 3 Purchases 230
" 28 L Mee 44 " 7 Rates 190
" 28 K Au 30 " 23 T Hip 146 R&B Ltd
" 30 Capital 300 " 23 K Sun 230 20X5 $ 20X5 $
" 23 R&B Ltd 300 Nov 23 Bank 300 Nov 3 Purchases 400
" 25 Van 700 " 30 Balance c/f 370 " 19 Purchases 270
" 30 Balance c/f 3,788
670 670
5,374 5,374

T Po
Purchases
20X5 $ 20X5 $
20X5 $ 20X5 $ Nov 18 Returns outwards 20 Nov 3 Purchases 310
Nov 3 T Hip 160 Nov 30 Balance c/f 1,580 " 30 Balance c/f 370 " 19 Purchases 80
" 3 K Sun 230
390 390
" 3 R&B Ltd 400
" 3 T Po 310
" 19 T Po 80 Cash
" 19 R&B Ltd 270 20X5 $ 20X5 $
" 19 D Chen 130 Nov 5 Sales 240 Nov 17 Wages 40
1,580 1,580 " 26 Loan from A Wong 400 " 30 Balance c/f 600
640 640

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Sales Returns Inwards
20X5 $ 20X5 $ 20X5 $ 20X5 $
Nov 30 Balance c/f 1,490 Nov 5 Cash 240 Nov 20 K Au 2 Nov 30 Balance c/f 6
" 11 L Mee 48 " 20 L Mee 4
" 11 K Au 32 6 6
" 11 R Hung 1,170
1,490 1,490
Van
20X5 $ 20X5 $
Rent Nov 21 U Z Motors 500 Nov 30 Balance c/f 1,200
20X5 $ 20X5 $ " 25 Bank 700
Nov 6 Bank 20 Nov 30 Balance c/f 20 1,200 1,200

Rates U Z Motors
20X5 $ 20X5 $ 20X5 $ 20X5 $
Nov 7 Bank 190 Nov 30 Balance c/f 190 Nov 30 Balance c/f 500 Nov 21 Van 500

L Mee Loan from A Wong


20X5 $ 20X5 $ 20X5 $ 20X5 $
Nov 11 Sales 48 Nov 20 Returns inwards 4 Nov 30 Balance c/f 400 Nov 26 Cash 400
" 28 Bank 44
48 48
Trial Balance as at 30 November 20X5
Dr Cr
K Au
$ $
20X5 $ 20X5 $ Capital 5,300
Nov 11 Sales 32 Nov 20 Returns inwards 2 Bank 3,788
" 28 Bank 30 Purchases 1,580
32 32 R&B Ltd 370
T Po 370
R Hung Cash 600
Sales 1,490
20X5 $ 20X5 $ Rent 20
Nov 11 Sales 1,170 Nov 30 Balance c/f 1,170 Rates 190
R Hung 1,170
Wages Wages 40
Returns outwards 34
20X5 $ 20X5 $ D Chen 130
Nov 17 Cash 40 Nov 30 Balance c/f 40 Returns inwards 6
Van 1,200
Returns Outwards U Z Motors 500
20X5 $ 20X5 $ Loan from A Wong 400
Nov 30 Balance c/f 34 Nov 18 T Hip 14 8,594 8,594
" 18 T Po 20
34 34

D Chen
20X5 $ 20X5 $
Nov 30 Balance c/f 130 Nov 19 Purchases 130

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7.11
(a) P Lee
Trial Balance as at 30 June 20X7
Dr Cr
$ $
Capital 10,800
Fixtures 5,770
Sales ($17,500 + $200 + $260) 17,960
Purchases ($12,100 + $420 – $480) 12,040
Returns inwards ($350 + $35) 385
Returns outwards ($420 + $50) 470
Wages ($1,900 + $600) 2,500
Rent 3,550
Postage 28
Commission 85
Commission received 780
Debtors: T Shek ($490 + $200 – $35) 655
A Hip ($830 + $260 – $500) 590
Creditors: L Chan 210
F Law 420
Drawings 480
Bank 4,557
30,640 30,640

(b) Bank
20X7 $ 20X7 $
Jun 30 Balance b/f 5,110 Jun 30 Wages 600
" 30 A Hip 500 " 30 Postage 28
" 30 Commission 85
" 30 W Yau 340
" 30 Balance c/f 4,557
5,610 5,610

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7.12X
K Wong
Trial Balance as at 31 May 20X8
Dr Cr
$ $
Buildings 12,000
Machinery 5,510
Office equipment 1,750
Fixtures ($1,800 – $140) 1,660
Debtors: T Mee 870
T T Ltd ($1,010 + $220) 1,230
Sun Supplies 140
Creditors: Sing Ltd ($690 + $500) 1,190
W Mei ($500 – $45) 455
Salaries and wages 1,870
General expenses ($610 + $160) 770
Rent 3,800
Sales ($28,700 + $220) 28,920
Purchases ($18,120 + $500) 18,620
Returns outwards 45
Returns inwards 360
Bank ($8,020 – $1,750 – $3,800 – $2,000) 470
Cash ($5,000 – $160) 4,840
Capital ($18,280 + $5,000) 23,280
53,890 53,890

Bank
20X8 $ 20X8 $
May 31 Balance b/f 8,020 May 31 Office equipment 1,750
" 31 Rent 3,800
" 31 Loan from K Tse 2,000
" 31 Balance c/f 470
8,020 8,020

7.13X
All transactions of a business are recorded in books using double entry methods. Therefore, each transaction
would have a debit entry and a credit entry. When we post the debit balances and credit balances of all the
accounts in books to a trial balance, the total of all debit balances would always be the same as the total of all
credit balances. The two sides of a trial balance are always equal.

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