Trial Balance and Rectification of Errors | Class 11 Accountancy Notes

Methods of Preparing Trial Balance

There are three common methods of preparing a trial balance: (i) Totals Method, (ii) Balances Method, and (iii) Combined Method. In the Totals Method, the total of debit amounts and total of credit amounts recorded in ledger accounts are taken directly without calculating balances. The debit and credit totals are then compared. In the Balances Method, the balances of ledger accounts are ascertained first by calculating the difference between total debits and credits for each account. These balances are then listed in the trial balance. The Combined Method involves taking the total amounts of some accounts and the balances of others, depending on the nature of the accounts. Each method ultimately aims to verify that the total debits equal total credits to ensure arithmetical accuracy. The choice of method depends on the accountant's preference and the nature of the accounts maintained.

📊 Diagram: Tables on page 6 to 9 illustrate trial balances prepared using Totals, Balances, and Combined methods with sample ledger accounts and amounts.

🧪 Activity: No specific activity in this section.

🔗 Connection: Leads to understanding errors that can occur despite trial balance tallying.

Table on page 6 (7×9)

| | Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

| | 2014 Dec. 31 | Balance c/d | | 60,000 | 2014 Jan. 01 | Balance b/d Cash | | 40,000 20,000 | | 60,000 2015 60,000 Jan. 01 Balance b/d 60,000 Rohan’s Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 2014 Cash 40,000 Jan. 01 Balance b/d 10,000 Dec. 31 Balance c/d 20,000 Purchases 50,000 60,000 2015 60,000 Jan. 1 Balance b/d 20,000 Machinery Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 2014 Dec. 31 Balance b/d 20,000 Depreciation 3,000 Dec. 31 Balance c/d 17,000 20,000 20,000 2015 Jan. 01 Balance b/d 17,000 Rahul’s Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 2014 Jan. 01 Balance b/d 15,000 Cash 55,000 Sales 60,000 Dec. 31 Balance c/d 20,000 | | | | 60,000 | 2015 Jan. 01 | Balance b/d | | 60,000 |

| | Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount | | | 2014 Jan. 01 | Balance b/d Sales | | 15,000 60,000 | 2014 Dec. 31 | Cash Balance c/d | | 55,000 20,000 | | | 2015 Jan. 01 | Balance b/d | | 75,000 | | | | 75,000 |

Table on page 6 (3×8)

| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

| 2014 Dec. 31 | Cash Balance c/d | | 40,000 20,000 | 2014 Jan. 01 2015 Jan. 1 | Balance b/d Purchases Balance b/d | | 10,000 50,000 |

Table on page 6 (3×8)

| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

| 2014 Dec. 31 2015 Jan. 01 | Balance b/d Balance b/d | | 20,000 | 2014 Dec. 31 | Depreciation Balance c/d | | 3,000 17,000 |

Table on page 7 (9×9)

| | Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

| Cash 10,000 70,000 Cash Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 2014 Jan. 01 Balanc e b/d 15,000 Rohan 40,000 Capital 20,000 Wages 5,000 Rahul 55,000 Purchases 12,000 Sales 10,000 Dec. 31 Balance c/d 43,000 1,00,000 1,00,000 2015 Jan. 01 Balance b/d 43,000 Wages Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 Cash 5,000 5,000 Depreciation Account Dr. Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 2014 Machinery 3,000 | | | | | | Cash | | 10,000 |

| | Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

Table on page 7 (3×8)

| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

| 2014 Jan. 01 2015 Jan. 01 | Balanc e b/d Capital Rahul Sales Balance b/d | | 15,000 20,000 55,000 10,000 | 2014 Dec. 31 | Rohan Wages Purchases Balance c/d | | 40,000 5,000 12,000 43,000 |

Table on page 7 (3×8)

| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |

Table on page 8 (9×14)

| | Date | | Particulars | J.F. | Amount | | | Date | Particulars | | J.F. | Amount | |

| | 2014 | | Rohan Cash | | 50,000 12,000 | | | | | | | | | | 62,000 The trial balance under the three methods is illustrated below: (i) Trial Balance as at March 31, 2014 (Using Totals Method) Account L.F. Debit Credit Title Total Total Rawat 60,000 Rohan 40,000 60,000 Machinery 20,000 3,000 Rahul 75,000 55,000 Sales 70,000 Cash 1,00,000 57,000 Wages 5,000 Depreciation 3,000 Purchases 62,000 3,05,000 3,05,000 (ii) Trial Balance as at March 31, 2014 (Using Balances Method) Account Title L.F. Debit Credit Balance Balance Rawat’s Capital 60,000 Rohan’s Capital 20,000 Machinery 17,000 Rahul 20,000 Sales 70,000 Cash 43,000 Wages 5,000 Depreciation 3,000 | | | | | | | | | | | | | |

| | | Account Title | | | | L.F. | Debit Balance | | | Credit Balance | | | | | | | Rawat’s Capital Rohan’s Capital Machinery Rahul Sales Cash Wages Depreciation | | | | | 17,000 20,000 43,000 5,000 3,000 | | | 60,000 20,000 70,000 | | | |

Table on page 8 (3×4)

| Account Title | L.F. | Debit Total | Credit Total |

| Rawat Rohan Machinery Rahul Sales Cash Wages Depreciation Purchases | | 40,000 20,000 75,000 1,00,000 5,000 3,000 62,000 | 60,000 60,000 3,000 55,000 70,000 57,000 |

Table on page 9 (5×7)

| | Account Title | L.F. | Debit Total | Credit Total | Debit Balance | Credit Balance |

| Rohan 40,000 60,000 20,000 Machinery 20,000 3,000 17,000 Rahul 75,000 55,000 20,000 Sales 70,000 70,000 Cash 1,00,000 57,000 43,000 Wages 5,000 5,000 Depreciation 3,000 3,000 Purchases 62,000 62,000 Total 3,05,000 3,05,000 1,50,000 1,50,000 Test Your Understanding - I Indicate against each amount wheather it is a debit or a credit balance, and prepare a trial balance as at March 31, 2014 based on the following balances: Accounts Title Amount ` Capital 1,00,000 Drawings 16,000 Machinery 20,000 Sales 2,00,000 Purchases 2,10,000 Sales return 20,000 Purchases return 30,000 Wages 40,000 Goodwill 60,000 Interest received 15,000 Discount allowed 6,000 Bank overdraft 22,000 Bank loan 90,000 Debtors : Nathu 55,000 Roopa 20,000 Creditors : Reena 35,000 Ganesh 25,000 | Rohan Machinery Rahul Sales Cash Wages Depreciation Purchases | | 40,000 20,000 75,000 1,00,000 5,000 3,000 62,000 | 60,000 3,000 55,000 70,000 57,000 | 17,000 20,000 43,000 5,000 3,000 62,000 | 20,000 70,000 |

| Cash 54,000 Stock on April 01, 2013 16,000 | | | | | | |