Why do we prepare trial balance?
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Because before balance sheet or profit and loss account we
need summarized data
| Is This Answer Correct ? | 2 Yes | 1 No |
Answer / janet
To check the Arithmetical accuracy of posting to the ledger accounts
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / jitu
the steps wise prepare the trial balance:
For each ledger account -- Cash, Accounts Payable, etc. --
total your credits and debits.
If the credit total is larger, subtract the debit total
from the credit total to get your ledger account total
which goes in the credit column of the trial balance
If the debit total is larger, subtract the credit total
from the debit total to get your ledger account total which
goes in the debit column of the trial balance
Put the ledger account total in the credit or debit column
of your trial balance (as identified above).
When you have debit or credit totals for each ledger
account, add all of your credit totals to get a credit
grand total.
Add all of your debit totals to get a debit grand total.
This is your trial balance.
| Is This Answer Correct ? | 6 Yes | 6 No |
Answer / mahi kaka
From Trail balance we calculate gross profit or
loss...which transfer to P&l a/c.
Inthis direct expence is included
| Is This Answer Correct ? | 5 Yes | 5 No |
Answer / charles
we prepare trial balance for complition of double entry
this is due to making sum up of all the transaction been
done to the business also for ledger account balances on
top of that can be used for making financial budget.....
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / kranthi
To know the arthematical accuracy of the ledger..it is a
statement containing various ledger balances prepared on
particular date.the effect of journal will show on
ledger..and effect of ledger will show on trail balence
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A firm had the following Balances on 1 January 1994: (i) Provision for bad and doubtful debts Rs 2,500 (ii) Provision for discounts on debtors Rs 1,200 (iii) Provision for discounts on creditors Rs 1,000 During the year, bad debts amounted to Rs 2,000, discounts allowed were Rs 100 and discounts received were Rs 200. During 1995 bad debts amounting to Rs l,000 were written off while discounts allowed and received were Rs 2,000 and Rs 5,000 respectively. Total debtors on 31 December, 1995 were Rs 48,000 before writing off bad debts, but after allowing discounts. On 31 December, 1995, this amount was Rs 19,000 after writing off the bad debts, but before allowing discounts. Total creditors on these two dates were Rs 20,000 and Rs 25,000 respectively. It is the firm’s policy to maintain a provision of 5% against bad and doubtful debts and 2% for discount on debtors and a provisions of 3% for discount on creditors. Show the accounts relating to provisions on debtors and provisions on creditors for the year 1994 and 1995.
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