7 - 1 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007

Book-keepingBook-keepingThe Trial BalanceThe Trial Balance

Chapter 7Chapter 7

7 - 2 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Learning Objective 1Learning Objective 1

Understand why the trial balance totals should equal one another

7 - 3 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Learning the trial balance totals Learning the trial balance totals should equal one anothershould equal one another

Total debit entries = Total credit entries

• For each debit entry there is a credit entry.

• For each credit entry there is a debit entry.

7 - 4 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial BalanceTrial BalanceA worked exampleA worked example

Exercise 7.3X:

- Record transactions in the books of C Hilton;

- Balance off the accounts;

- Extract a trial balance as at 30 June 2006.

Exercise 7.3X:

- Record transactions in the books of C Hilton;

- Balance off the accounts;

- Extract a trial balance as at 30 June 2006.

7 - 5 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance Trial Balance A worked example 7.3A worked example 7.3

June 1 C Hilton started in business with ₤9,000 in cashJune 1 C Hilton started in business with ₤9,000 in cash

Homework for students before Lecture book-keeping on Wednesday 3 December:Make double entry on accounts of worked example 7.3

7 - 6 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial BalanceTrial BalanceA worked example 7.3A worked example 7.3

June 2 Paid ₤8,000 of the cash into a bank accountJune 2 Paid ₤8,000 of the cash into a bank account

7 - 7 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 4 Paid rent for shop ₤300 by chequeJune 4 Paid rent for shop ₤300 by cheque

7 - 8 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 6 Bought goods on credit from Moorlands & Co. ₤675; J Swain ₤312; B Merton ₤225

June 6 Bought goods on credit from Moorlands & Co. ₤675; J Swain ₤312; B Merton ₤225

7 - 9 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 12 Sold goods for cash, ₤450June 12 Sold goods for cash, ₤450

7 - 10 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 13 Bought fixtures, paying by cheque, ₤230June 13 Bought fixtures, paying by cheque, ₤230

7 - 11 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 15 Sold goods on credit T Green ₤180; K Wood ₤367; P Brown ₤256

June 15 Sold goods on credit T Green ₤180; K Wood ₤367; P Brown ₤256

7 - 12 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 18 Sold goods for cash, ₤220June 18 Sold goods for cash, ₤220

7 - 13 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 20 Paid Moorlands & Co by cheque ₤675 and B Merton ₤225

June 20 Paid Moorlands & Co by cheque ₤675 and B Merton ₤225

7 - 14 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 21 Returned goods to J Swain ₤112 and paid the outstanding balance on their account by cheque

June 21 Returned goods to J Swain ₤112 and paid the outstanding balance on their account by cheque

7 - 15 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 24 Bought goods on credit from Moorlands & Co ₤220 and J Swain ₤92

June 24 Bought goods on credit from Moorlands & Co ₤220 and J Swain ₤92

7 - 16 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 26 Paid wages in cash, ₤366June 26 Paid wages in cash, ₤366

7 - 17 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 27 Cash drawings, ₤200June 27 Cash drawings, ₤200

7 - 18 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 29 Bought motor van, paying by cheque, ₤4,000June 29 Bought motor van, paying by cheque, ₤4,000

7 - 19 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 30 Sold goods on credit to T Green ₤300; K Wood ₤50; P Brown ₤60

June 30 Sold goods on credit to T Green ₤300; K Wood ₤50; P Brown ₤60

7 - 20 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Trial Balance: a worked example 7.3Trial Balance: a worked example 7.3

June 30 Received cheques from the following: T Green ₤180; K Wood ₤367

June 30 Received cheques from the following: T Green ₤180; K Wood ₤367

7 - 21 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

A worked example 7.3: A worked example 7.3: balancing off Cash accountbalancing off Cash account

Debit Cash CreditJune 1 Capital £9,000 June 2 Bank £8,000June 12 Sales £450 June 26 Wages £366June 18 Sales £220 June 27 Drawings £200

June 30 Balance c/d £1,104£9,670 £9,670

July 1 Balance b/d £1,104

7 - 22 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

A worked example 7.3: A worked example 7.3: balancing off Bank accountbalancing off Bank account

Debit Bank CreditJune 2 Cash £8,000 June 4 Rent £300June 30 T Green £180 June 13 Fixtures £230June 30 K Wood £367 June 20 Moorlands & Co £675

June 20 B Merton £225June 21 J Swain £200June 29 Motor van £4,000June 30 Balance c/d £2,917

£8,547 £8,547

July 1 Balance b/d £2,917

7 - 23 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

Learning Objective 2Learning Objective 2

Draw up a trial balance from a given set of accounts

7 - 24 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma

A worked example 7.3: A worked example 7.3: learning draw up a trial balancelearning draw up a trial balance

Trial balance of C Hilton as at 30 June 2006Dr Cr₤ ₤

Cash 1,104Bank 2,917Capital 9,000Rent 300Fixtures 230Purchases 1,524Sales 1,883Returns outwards 112Wages 366Drawings 200Motor van 4,000Moorlands& Co 220J Swain 92T Green 300K Wood 50P Brown 316

11,307 11,307

7 - 25 Wood/Robinson: Book-keeping and Accounts, 6e, © T. Sijtsma 2007

End of Chapter 7:End of Chapter 7:The Trial BalanceThe Trial Balance