Accounting-Cycle-Trial-Balance

AccountingCycleTrialBalanceJournalLedgerAdjustments&AdjustedTrialBalanceAccountingReportsTransactionStartfromClosingEntries&ClosingTrialBalance12456TrialBalance38/7/20203:03PM1Step3rdTrialBalance•TrialBalance•LimitationofTrialBalance•TrialBalanceFormat•JournalizedTransactions•PostedLedgerAccounts•PracticalTrialBalance•PracticalChapter’sReview8/7/20203:03PM2TrialBalance•Atrialbalanceisusedtoverifythatthedebitsandcreditsareinbalance–TakingtheaccountbalancesfromtheGeneralLedger–Listingtheaccountshavingdebitbalancesinonecolumnandthosehavingcreditbalancesintheothercolumn–Totalingthedebitbalances–Totalingthecreditbalances–Comparingthesumofthedebitbalancesandthesumofthecreditbalances.8/7/20203:03PM3TrialBalanceTrialBalanceisatooltosummarizetheclassifiedfinancialtransactions.ThistrailbalanceshowsthemathematicalaccuracyofjournalandLedger.TrialBalancehelpsanaccountanttomanageandcontrolallthefinancialdealingsofabusiness.oAtrialbalanceisalistofaccountsandtheirbalancesatagiventime.oTheprimarypurposeofatrialbalanceistoprove(check)thatthedebitsequalthecreditsafterposting.oIfthedebitsandcreditsdonotagree,thetrialbalancecanbeusedtouncovererrorsinjournalizingandposting.oTheproceduresforpreparingatrialbalanceconsistof:1)Listtheaccounttitlesandtheirbalances.2)Totalthedebitandcreditcolumns.3)Provetheequalityofthetwocolumns.8/7/20203:03PM4ATrialBalancedoesnotprovethatalltransactionshavebeenrecordedorthattheledgeriscorrect.Numerouserrorsmayexisteventhoughthetrialbalancecolumnsagree.Thetrialbalancemaybalanceevenwhen:i.Atransactionisnotjournalized,ii.Acorrectjournalentryisnotposted,(ErrorofOmission)iii.Ajournalentryispostedtwice,iv.Incorrectaccountsareusedinjournalizingorposting(Errorofprinciple)v.Errorofcommissionvi.Offsettingerrorsaremadeinrecordingtheamountofthetransaction.LimitationofaTrialBalance8/7/20203:03PM5Trialbalancedoesnotbalance–dueto:–Incorrectadditions–Incorrectrecordings–Incorrectdebitandcredit–Incorrectledgerbalance–Incorrectdebitandcreditinledger–Incorrectpostings–IncorrectmissingoftransactionLimitationofTrailBalance8/7/20203:03PM6RectificationofErrorTocorrectaMistakewecreateanotherentrytoreverse/correcterrorsTwoMethods:•DirectMethod•IndirectMethod8/7/20203:03PM7P/RL/RDebitCredit1Cash178,4002Equipments75,0003Inventory37,5004AccountReceivable05PrepaidSalaries20,0006OfficeSupplies25,0007Capital200,0008Loan91,6509AccountPayable50,00010AdmissionFee45,00011TutionFee15,00012Sales18,00013Salaries60,00014CostofGoodSold12,50015Interest1,25016Utilities10,000419,650419,650PrescriptionS-No:AKAMAcademyTrailBalanceforthemonthofJune2012ParticularBalanceTrialbalanceformatSerialNumberAccountsNameCreditAmountDebitAmountTotalCreditTotalDebit8/7/20203:03PM8Journalizedtransactions8/7/20203:03PM9P/RMonthDayL/RDebitCreditJune1Cash300,000Loan100,000Capital200,000AKAMOwnerInvestedCashforEstablishmentJune2Equipment60,000Inventory50,000Cash30,000AccountPayable80,000PurchasedEquipmentandInventoryJune3OfficeSupplies25,000Cash25,000AcquairedOfficeSuppliesJune5AccountPayable30,000Cash30,000PartialPaymenttoSupplierJune12Cash60,000AdmissionFee45,000TutionFee15,000ReceivedCashforProvisionofDELClassjune19Cash18,000Sales18,000Expense(CostofGoodSold)12,500Inventory12,500SoldInventoryforCashJune20PrepaidSalaryExpense20,000Cash20,000PaidAdvanceSalarytoReyazJune24OfficeEquipment15,000UtilitiesExpense10,000Cash25,000PaidforthreeFilecabinateandPetrolforOfficeJune28Loan8,350Interest1,250SalaryExpenses60,000Cash69,600PaidLoanRepaymentandSalaries670100670100PrescriptionDateBalanceAKAMAcademyGeneralJournalForthemonthofJune2012ParticularPostedledgerAccountsCashDebitCreditBalanceB/D16,4408/7/20203:03PM10PostedledgeraccountsCapitalDebitCreditBalanceB/D13,5008/7/20203:03PM11PostedledgeraccountsProjectorDebitCreditBalanceB/D14,6708/7/20203:03PM12PostedledgeraccountsSalaryExpenseDebitCreditBalanceB/D15,0008/7/20203:03PM13PostedledgeraccountsBankBalanceDebitCreditBalanceB/D1,6708/7/20203:03PM14PostedledgeraccountsUSBDebitCreditBalanceB/D5008/7/20203:03PM15PostedledgeraccountsAccountsPayableDebitCreditBalanceB/D5008/7/20203:03PM16PostedledgeraccountsSalesDebitCreditBalanceB/D1,4008/7/20203:03PM17Practicaltrailbalance8/7/20203:03PM18P/RL/RDebitCredit1Cash178,4002Equipments75,0003Inventory37,5004AccountReceivable05PrepaidSalaries20,0006OfficeSupplies25,0007Capital200,0008Loan91,6509AccountPayable50,00010AdmissionFee45,00011TutionFee15,00012Sales18,00013Salaries60,00014CostofGoodSold12,50015Interest1,25016Utilities10,000419,650419,650Total:PrescriptionS-No:AKAMAcademyTrailBalanceforthemonthofJune2012ParticularBalance