1 / 13

Trial Balance

Trial Balance. Accounting I. Key Vocabulary. Proving the Ledger Trial Balance Transposition Error Slide Error Correcting Entry. Definitions:. Adding all the debit balances and adding all the credit balances and then comparing the two totals to see whether they are equal.

dorie
Télécharger la présentation

Trial Balance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Trial Balance Accounting I

  2. Key Vocabulary • Proving the Ledger • Trial Balance • Transposition Error • Slide Error • Correcting Entry

  3. Definitions: • Adding all the debit balances and adding all the credit balances and then comparing the two totals to see whether they are equal. • A list of all the account names and the current balances. • When two digits within an amount are accidentally reversed. This error is divisible by 9. • When the decimal place is moved ( or add or subtract a zero) • An entry made to correct an error in a journal entry discovered AFTER posting.

  4. The Accounting Cycle Taken from Glencoe Accounting, 5th ed.,2004

  5. The Trial Balance • The purpose of the trial balance is to prove that the general ledger is in balance. • To prepare a trial balance: • List ALL accounts, even those with zero balances, in the order they appear in the ledger. • Copy all debit balances to the debit column and credit balances to the credit column. • Total each column and compare balances.

  6. Trial Balance Debit Balances Credit Balances Compare Balances

  7. Finding Errors • If the first addition of the columns gives unequal results, add them again, an addition error may have occurred. • If the balances are still uneven, check if the difference is divisible by 9. If so, a transposition error has occurred. • If the difference is an even amount with a “zero”, a slide error has occurred.

  8. More on Errors 4. Most errors are either computational or incorrect postings. 5. Computational errors are easier to find, simply re-add.Incorrect postings take longer to find because it involves looking through all of the ledger accounts. 6. Occasionally a debit will be recorded as a credit and vice versa. These sometimes take a while to find.

  9. Correcting Entries Anyone who works in accounting understands the saying “ To err is human…” When mistakes are made in accounting, however, one rule applies: NEVER erase an error. Three types of errors: • Error in journal entry that is not posted. • Error in posting to the ledger when the journal entry is correct. • Error in journal entry that is posted.

  10. Example • If a utility bill was accidentally posted to the maintenance expense account, a new journal entry would have to be made to undo and correct the entry on the date the error was found, using the same source document:

  11. Example • From the journal entry, the corrected posting to the ledger accounts would look like this, with the words “correcting entry” in the description box:

  12. The Trial Balance • After errors have been found and corrected, run trial balance again. Debits and credits should be equal, if not, go through error finding process again.

  13. References • Guerrieri, Haber, Hoyt, & Turner. (2004) Glencoe Accounting: Real-World Applications & Connections. (5th ed.) Woodland Hills, CA: Glencoe McGraw Hill.

More Related