💥 SUMMARIZING CHANGES IN FINANCIAL POSITION [PART : 5] 💥

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ALL ABOUT ACCOUNTING : 44th BLOG

         💎ACCOUNTING💎

★ Accounting exercise and practices : 
Lesson : 4 [Part : 5]

Hi friends 🙏

Today's discuss remaining part of summarizing changes in financial position 

                             So let's discuss ....


★ SUMMARIZING CHANGES IN FINANCIAL POSITION :

 ⭐ TRIAL BALANCE :

At the end of an accounting period (usually monthly ), once all journal entries have been made and posted, It is necessary to verify that the debits and credits are in balance. This procedure is referred to as preparing the Trial Balance. 

The Trial Balance is prepared by taking the account balances from the general ledger and listing the accounts having debit balances in one column and those having credit balances in the other column. Next, The debit balances are totalled and the credit balances are totalled. Finally, The sum of the dabit balances is compared with the sum of the credit balances. The sums should be equal in order for the ledger accounts to be in balance. 

* General format of Trial Balance :
                            [FIRM NAME]                     
                         TRIAL BALANCE
                    AS ON DATE __________ 
Particular.                        Debit.          Credit.   
   
Total :  

Lets create a TRIAL BALANCE of ABC ENTERPRISE against this transactions :-

1. Company's cash on hand as on 31-03-2020 is ₹10,000.

2. Sundry receivable as on 31-03-2020 is ₹ 10,000.

3. Office exp.  As on 31-03-2020 is ₹ 8,000.

4. Loans payable to bank outstanding amount as on 31-03-2020 is ₹ 50,000.

5. Stock in trade as on 31-03-2020 is ₹ 15,000.

6. Rent exp.  Paid or payable as on 31-03-2020 is ₹ 5,000.

7. Salaries paid or payable as on 31-03-2020 is ₹ 5,000.

8. Utility exp.  Paid or payable as on 31-03-2020 is ₹ 2,000

9. Purchase of raw materials as on 31-03-2020 is ₹ 10,000.

10. Sales of goods or services as on 31-03-2020 is ₹ 20,000.

11. Sundry payable as on 31-03-2020 is ₹10,000.

- prepare a Trial Balance for ABC ENTERPRISE against above declare transactions up to year ended 31-march-2020.

              ABC ENTERPRISE                                   
                  TRIAL BALANCE                                    
                    31-March-2020  
Particular.                                     Debit.              credit           
Cash A/C   ₹ 10,000 
Sundry receivable ₹ 10,000 
Office exp. ₹ 8,000 
Bank loan    ₹ 5,000
Stock in trade   ₹ 15,000
Rent exp.   ₹ 5,000 
Salary exp.   ₹  5,000 
Utility exp.   ₹ 2,000 
Purchase A/C   ₹ 10,000 
Sales A/C   ₹ 20,000
Sundry payable    ₹ 10,000
Total :   ₹ 50,000  ₹ 50,000

If the trail balance does not balance, The general ledger should be checked to ensure that every account balance is correct and has been transferred properly. 






Remaining part of  summarizing changes in financial position discuss in 45th blog... 

                        So wait my 45th blog... 
 
                                                                             
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