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प्रश्न
What are the objectives of preparing trial balance?
उत्तर
The trial balance is prepared with the following objectives:
- Test of arithmetical accuracy: Trial balance is the means by which the arithmetical accuracy of the book-keeping work is checked. When the totals of the debit column and credit column in the trial balance are equal, it is assumed that posting from subsidiary books, balancing of ledger accounts, etc. are arithmetically correct. However, there may be some errors that are not disclosed by the trial balance.
- Basis for preparing final accounts: Financial statements, namely, trading and profit and loss account and balance sheet are prepared on the basis of a summary of ledger balances obtained from the trial balance.
- Location of errors: When the trial balance does not tally, it is an indication that certain errors have occurred. The errors may have occurred at one or more of the stages of the accounting process, namely, journalizing or recording in subsidiary books, totaling subsidiary books, posting in ledger accounts.
Balancing the ledger accounts, carrying ledger account balances to the trial balance and totaling the trial balance columns, etc. Hence, the errors should be located and rectified before preparing the financial statements. - Summarised information of ledger accounts: The summary of ledger accounts is shown in the trial balance. Ledger accounts have to be seen only when details are required in respect of an account.
APPEARS IN
संबंधित प्रश्न
Which of the following is/are the objective(s) of preparing trial balance?
State whether the balance of the following accounts should be placed in the debit or the credit column of the trial balance:
- Carriage outwards
- Carriage inwards
- Sales
- Purchases
- Bad debts
- Interest paid
- Interest received
- Discount received
- Capital
- Drawings
- Sales returns
- Purchase returns
‘A trial balance is only a prima facie evidence of the arithmetical accuracy of records’. Do you agree with this statement? Give reasons.
Describe the purpose for the preparation of trial balance
As an accountant of a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of ₹ 15,600 on the trial balance. However, you have figured out that a correctly recorded credit purchase of pen-drive for ₹ 3,500 was posted from the journal to the ledger with a ₹ 3,500 debit to Office Equipment and another ₹ 3,500 debit to creditors accounts.
Answer each of the following questions and present the amount of any misstatement:
(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?
(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?
(c) Is the debit column total of the trial balance overstated, understated, or correctly stated?
(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?
(e) If the debit column total of the trial balance is ₹ 2,40,000 before correcting the error, what is the total of credit column.
