Lesson Notes By Weeks and Term - Senior Secondary 1
Trial balance II
Trial balance II
Term: 2nd Term
Week: 9
Class: Senior Secondary School 1
Age: 15 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Financial accounting
Topic:- Trial Balance II
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
|
PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on exercises on trial balance |
Students pay attention |
|
STEP 2 EXPLANATION |
She explains the meaning of trial balance
|
Students pay attention and participates |
|
STEP 3 DEMONSTRATION |
She shows the learners how to prepare a trial balance using provided details |
Students pay attention and participate |
|
STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
TRIAL BALANCE
Preparation of Trial Balance:
The statement for trial balance can be prepared at any time in the business like at the end of a financial year, for half yearly, at the end of a quarter, or at the end of every month. But most often trial balance is prepared at the end of the financial year so that it can be ensured that books of accounts are maintained with complete accuracy. The statement for trial balance is not prepared as such for a particular period rather it is prepared on a set date. Following are the three methods for preparing the statement for trial balance:
While preparing the statement of trial balance under this method, all the ledger accounts with the debit balances are carried forward to the debit side of the trial balance and all the ledger accounts with the credit balances are carried forward to the credit side of the trial balance. As the name suggests, it is a method related to the balances, so the balances are available in the ledger account at the end after all the adjustments are carried forward to the trial balance. Also, if any of the ledger accounts do not show any balance i.e. the total on both the debit and the credit side is the same, then there is no need to carry it to the trial balance. So, in the end, if the debit and credit side of the trial balance matches, it can be said that the trial balance has been well prepared.
While preparing the statement of trial balance under this method, unlike the balance method, not only balances rather the total amount on the debit side of the ledger account is transferred to the debit side of the trial balance and the total amount on the credit side of the ledger account is transferred to the credit side of the trial balance. Under this method, the statement for trial balance can be prepared promptly after posting all the entries to ledger accounts before any adjustments are made to them.
Under this method, two methods – ‘Balance Method’ and ‘Total Amount Method’ are combined to prepare the statement of trial balance. It implies that in total, four columns are prepared, two columns are for recording the debit and credit balances of ledger accounts and two columns are for recording the debit and credit totals of various ledger accounts. This method is rarely used and not so frequently used while making the statement for the trial balance.
Question 1
Prepare Trial Balance for the following Balances as on 31st March 2021
|
Balances |
₹ |
|
Cost of Goods Sold |
5,20,000 |
|
Opening Stock |
50,000 |
|
Closing Stock |
50,000 |
|
Salary and Wages |
50,000 |
|
Sales |
8,00,000 |
|
Plant & Machinery |
2,00,000 |
|
Drawing |
50,000 |
|
Investment |
4,30,000 |
|
Creditors |
1,00,000 |
|
Capital |
4,00,000 |
Solution:
TRIAL BALANCE
(As on 31st March 2021)
|
Name of Account |
L.F |
Debit Balance |
Credit Balance |
|
₹ |
₹ |
||
|
Cost of Goods Sold |
5,20,000 |
– |
|
|
Closing Stock |
50,000 |
– |
|
|
Salary and Wages |
50,000 |
– |
|
|
Sales |
– |
8,00,000 |
|
|
Plant & Machinery |
2,00,000 |
– |
|
|
Drawing |
50,000 |
– |
|
|
Investment |
4,30,000 |
– |
|
|
Creditors |
– |
1,00,000 |
|
|
Capital |
– |
4,00,000 |
|
|
Total |
13,00,000 |
13,00,000 |
Cost of Goods Sold = Opening Stock + Net Purchase+Direct Expenses – Closing Stock
Question 2
The following balances were extracted from the ledger of Mr.Sachin as on 31st March 2021. You are required to prepare a trial balance as on that date.
|
Balances |
$ |
|
Drawings |
60,000 |
|
Salaries |
95,000 |
|
Capital |
4,40,000 |
|
Sales return |
10,000 |
|
Sundry creditors |
2,30,000 |
|
Purchases return |
11,000 |
|
Bills payable |
40,000 |
|
Commission paid |
1,000 |
|
Sundry debtors |
5,00,000 |
|
Trading expenses |
25,000 |
|
Bills receivable |
52,000 |
|
Discount earned |
5,000 |
|
Plant & Machinery |
45,000 |
|
Rent |
20,000 |
|
Opening stock |
3,70,000 |
|
Bank overdraft |
60,000 |
|
Cash in hand |
9,000 |
|
Purchases |
7,08,000 |
|
Cash at bank |
25,000 |
|
Sales |
11,80,000 |
|
Investment |
46,000 |
|
Closing Stock |
80,000. |
Solution:
TRIAL BALANCE
(As on 31st March 2021)
|
Name of Account |
L.F |
Debit Balance |
Credit Balance |
|
$ |
$ |
||
|
Drawings |
60,000 |
– |
|
|
Salaries |
95,000 |
– |
|
|
Capital |
– |
4,40,000 |
|
|
Sales return |
10,000 |
– |
|
|
Sundry creditors |
– |
2,30,000 |
|
|
Purchases return |
– |
11,000 |
|
|
Bills payable |
– |
40,000 |
|
|
Commission paid |
1,000 |
– |
|
|
Sundry debtors |
5,00,000 |
– |
|
|
Trading expenses |
25,000 |
– |
|
|
Bills receivable |
52,000 |
– |
|
|
Discount earned |
– |
5,000 |
|
|
Plant & Machinery |
45,000 |
– |
|
|
Rent |
20,000 |
– |
|
|
Opening stock |
3,70,000 |
– |
|
|
Bank overdraft |
– |
60,000 |
|
|
Cash in hand |
9,000 |
– |
|
|
Purchases |
7,08,000 |
– |
|
|
Cash at bank |
25,000 |
– |
|
|
Sales |
– |
11,80,000 |
|
|
Investment |
46,000 |
– |
|
|
Total |
19,66,000 |
19,66,000 |
EVALUATION : 1. Discuss the procedures of preparing a trial balance
|
Balances |
$ |
|
Purchase: |
5,05,000 |
|
Return Outward: |
5,000 |
|
Sales: |
8,20,000 |
|
Return Inward: |
20,000 |
|
Debtors: |
2,80,000 |
|
Cash in Hand: |
20,000 |
|
Capital: |
4,00,000 |
|
Plant and Machinery: |
3,20,000 |
|
Wages: |
30,000 |
|
Drawing: |
50,000 |
|
Furniture: |
35,000 |
|
Bank Overdraft: |
32,000 |
|
Commission Received: |
10,000 |
|
Rent Paid: |
7000 |
|
General Reserve: |
30,000 |
|
Manufacturing Expenses: |
25,000 |
|
Prepaid Expenses: |
5000 |
|
Bad Debt: |
10,000 |
|
Creditors: |
80,000 |
|
Administrative Expenses: |
50,000 |
|
Bills Receivable: |
20,000 |
|
Opening Stock: |
25,000 |
|
Carriage Inward: |
5000 |
|
Carriage Outward: |
10,000 |
|
Bills Payable: |
30,000 |
|
Bank Loan: |
10,000 |
|
Balances |
$ |
|
Capital: |
5,00,000 |
|
Opening Stock: |
75,000 |
|
Purchase: |
4,25,000 |
|
Salary & Wages: |
10,000 |
|
Depreciation: |
50,000 |
|
Purchase Return: |
15,000 |
|
Sales: |
6,20,000 |
|
Sales Return: |
20,000 |
|
Plant & Machinery: |
4,00,000 |
|
Debtors: |
1,50,000 |
|
Drawing: |
40,000 |
|
Travel Expenses: |
10,000 |
|
Creditors: |
2,20,000 |
|
Bills Payable: |
80,000 |
|
Motor Vehicle: |
2,00,000 |
|
Cash in Hand: |
25,000 |
|
Investment: |
40,000 |
|
Bad Debts: |
6000 |
|
Carriage: |
4000 |
|
Closing Stock: |
65,000 |
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively