SHS

Module 13
ABM- FABM1
Grade 11: Module 13
First Edition, 2021

Copyright © 2021
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form
without written permission from the copyright owners.

Development Team of the Module

Author: Jimena Veronica T. Nieva, MT l

Editor: SDO La Union, Learning Resource Quality Assurance Team

Illustrator: Ernesto F. Ramos Jr. P - II

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent

Vivian Luz S. Pagatpatan, Ph.D

Assistant Schools Division Superintendent

German E. Flora, Ph.D, CID Chief

Virgilio C. Boado, Ph.D, EPS in Charge of LRMS

Lorna O. Gaspar , EPS in Charge of ABM

Michael Jason D. Morales, PDO II

Claire P. Toluyen, Librarian II
 TARGET

This unit covers the knowledge, skills and attitudes (KSA) in listing accounts
and transferring and summarizing trial balances from a ledger. A trial balance is a
list of accounts with ledger balances.

The report of ledger balances will be determined by totaling the debit column
and the credit column. The objective is to get an equal footing to consider that the
accounts are balanced both sides. It is prepared at the end of the accounting period.

LEARNING COMPETENCY: Prepares a Trial Balance (ABM_FABM11-IVe-j-38)

After going through this information sheet, you are expected to:

1. know the meaning and objective of a Trial Balance

2. know the format of a Trial Balance
3. prepare a Trial Balance
Pre-Test:

Direction: Indicate the normal balances of these account titles. Identify whether
each fall under debit or credit balances by placing a checkmark () under the
column corresponding your answer.

Account Titles Debits Credits

Accounts Receivable
Accounts Payable
Advances to employees
Advertising Expense
Allowance for bad debts
Capital
Depreciation Expense
Equipment
Rentals
Sales
Purchase Return and Allowances
Merchandise Inventory
Supplies Expense
Taxes Payable
Interest Income
Interest payable
Furniture and Fixtures
Prepaid Supplies
Salaries and Wages
Light, Power and Water

Jumpstart
For you to understand the lesson well, let us have first an exercise.
Have fun and enjoy!

The trial balance is a schedule or list of those debit and credit balances which
are extracted from various accounts in the ledger and balances such as Cash On
Hand and Cash In Bank as shown in the cash book are also included in it. (R.N.
Carter)

Trial Balance is prepared in a statement form that shows the debits and
credits of all accounts in the ledger and it is also called Statement of Balances.
Activity 1: Practice Drill

Direction: Indicate the normal balances of each account by identifying which

account shall be debited or credited. Use a separate sheet for your answers.

1. Started a business with cash, which account is credited?

Cash
Capital
2. Purchased equipment on account, which account is credited?
Cash
Accounts Payable
3. Sold merchandise in cash, which account is debited?
Cash
Sales
4. Sold merchandise on account, which account is debited?
Cash
Accounts Receivable
5. Received payment for merchandise sold on account, which account is credited?
Cash
Accounts Receivable

Discover

Objectives of a Trial Balance

1. to check the arithmetical accuracy of the ledger accounts.

2. to locate the errors.
3. to facilitate the preparation of the final accounts.
Source: https://www.slideshare.net/srinivasmethuku/topic-8-trial-balance

Purposes of a Trial Balance

1. Trial Balance acts as the first step in the preparation of the financial
statements.
2. Trial Balance ensures that the account balances are accurately extracted from
the accounting ledgers.
3. Trial Balance assists in the identification and rectification of errors.
4. Trial Balance ensures that for every debit entry recorded, a corresponding
credit entry has been recorded in the books following the double entry concept
of accounting.
Format:

JTN Enterprises
Trial Balance
December 31, 20XX

Particulars/ Particulars
Ledger Ledger/
Account Debit (Dr) / Account Credit (Cr)
/Folio Folio
Title Title

Total

Table 1. General Ledger

Particulars/Account Title Ledger/Folio Debit (Dr) Credit (Cr)

Total

Table 2. Trial Balance

Pointers in the preparation of a Trial Balance

✓ Heading must contain the name of the company and the date of the Trial
Balance preparation
✓ Particulars or the Account Column contains the list of all ledgers accounts
✓ Ledger Folio of the respective account is entered in the next column
✓ The Debit balance of the respective account is written in the debit column
✓ The Credit balance of the respective account is written in the credit column
✓ The last two columns are totalled at the end
✓ A debit balance is either an Asset, Loss or Expense
 ✓ A credit balance is either a Liability, Capital (Owner’s Equity), Gain or Income

Limitations of a Trial Balance

✓ Though the Trial Balance helps to ensure the arithmetical accuracy of the
books of accounts, it is possible only when the Bookkeeper or Accountant has
not committed any error.
✓ As all the errors are not disclosed by the Trial Balance, it would not be
regarded as a conclusive proof of correctness of the Books of Accounts
maintained.

Source: https://www.slideshare.net/srinivasmethuku/topic-8-trial-balance
https://www.slideshare.net/shruti18997/trial-balance-28810484?next_slideshow=1

Explore

Direction: Prepare a Trial Balance as of December 31, 20XX from the

following balances of JTN Enterprises. Use a separate sheet for your answers.

Cash Php 100,000 Accounts Payable P 50,000

Accounts Receivable 400,000 Notes Payable 200,000
Merchandise Inventory 250,000 J. Capital ?
Prepaid Supplies 5,000 Allow. for Bad Debts 20,000
J. Drawings 50,000

Deepen
Let us check how well you have understood the lessons by working on some of the
enrichment activities below. Good luck!

Enrichment Activity 1

Direction: Analyze and journalize the following merchandising transactions of

Infinity Enterprise for July 20XX. The store showed the ledger balances on July 01.

Account Titles Dr Cr
Cash 22,500
Accounts Receivable 17,500
Merchandise Inventory 10,000
Accounts Payable 16,500
Juan Gabriel, Capital 33,500
Total P 50,000 P 50,000
July 1 Purchased merchandise on account from Pressly Inc., P22,000, terms:
n/30
July 2 Collection of account, P10,000
July 3 Sold merchandise on account, P22,650, terms: 2/10, n/30
July 7 Paid, P600, freight on July 3 sales
July 11 Purchased supplies for cash, P5,000
July 12 Purchased merchandise for cash, P11,500
July 13 Payment of account to supplier, P16,500
July 15 Paid salaries of P5,000
July 16 Received refund for poor quality merchandise from supplier on cash
purchase, P1,750
July 17 Purchased merchandise from Croc Distributors, P12,000, terms: 2/10,
n/30
July 18 Paid freight on July 17 purchase, P1,150
July 24 Sold merchandise for cash, P24,000
July 25 Purchased merchandise from Minnie Company, P16,000, terms: 2/10,
n/30
July 26 Received collections in full from customers billed July 03
July 29 Made refunds to cash customers for defective merchandise, P750
July 31 Paid Pressly Inc. in full
July 31 Sold merchandise on account, P29,500 FOB, terms: 2/10, n/30
July 31 Paid salaries of P5,000

Required: Prepare a Trial Balance

You’re done on this part. Great job! Congratulations!

Gauge
Direction: Multiple Choice. Choose the best answer and write the
letter on the blank provided before the number.

________1. Which of the following is NOT true about a Trial Balance?

A. A list of all ledger accounts where their balances are extracted from the
General Ledger
B. It reflects the Net Profit of the company
C. It reflects all the debit and credit balances of all accounts in the General
Ledger
D. The heading reflects the company’s name and the date of preparation

________2. The Trial Balance is used to check the accuracy of what?

A. Balance Sheet balances B. Cash Flow balances
C. General Ledger Account Balances D. Income Statement balances
_______3. What accounting book is used in the preparation of a Trial Balance?
A. General Ledger accounts B. General Journal
C. Special Journal D. Subsidiary Ledger

________4. When do you prepare a Trial Balance?

A. At the end of the year B. At the end of the accounting period
C. At the end of the month D. Frequently in a year

________5. Why does a business prepare a Trial Balance?

A. to calculate the Net Profit or Net Loss of a company
B. to check cash balances
C. to check the arithmetical accuracy of the ledgers
D. to show the financial performance of a business

________6. Which account in the Trial Balance represents a credit balance?

A. Assets B. Liability
C. Net Loss D. Plant, Property and Equipment (PPE)

________7. What is the account that normally appears DEBIT in a Trial Balance?
A. Owner’s Capital B. Owner’s Drawing
C. Net Income D. Net Loss

________8. What is the use of a trial balance?

A. It is a financial statement
B. It records the balance of the balance sheet
C. It does not contribute to the accounting cycle
D. It records balances of accounts

________9. A trial balance prepared after taking into account the effect of adjusting
entries is known as?
A. Adjusted Trial Balance B. Financial Trial Balance
C. Normal Balance D. Unadjusted Trial Balance

________10. When debit balance is equal to the credit balance, then the trial
balance means?
A. Account balances are correct
B. Mathematically, Assets = Liabilities + Capital
C. No mistake in recording transactions
D. No mistake in posting entries in the ledger Accounts

________11. A company had the following accounts and balances year-end:

Cash Php30,000
Accounts receivable 32,000
Accounts payable 20,000
Fees earned 65,000
Rent expense 15,000
Insurance expense 4,800
 Supplies 5,000
Sam, Capital 19,800
Sam, Withdrawals 18,000
If all of the accounts have normal balances, what are the totals for the trial
balance?

A. Php 45,200. B. Php 67,000.

C. Php209,600. D. Php104,800

12-15, The account balances for Glad Inc., Inc. as of May 31, 2016, are listed
below in alphabetical order:
Accounts Payable Php12,000 Equipment Php18,000
Accounts Receivable 14,000 Land 52,000
Building 42,000 Notes Payable 30,000
Cash 8,000 Capital Stock 92,000

On June 3, Glad, Inc collected Php4,000 of its accounts receivable

and paid Php7,000 of its accounts payable. In addition, 2,000 of
additional shares of capital stock are issued for Php5,600.

_______12. In a trial balance prepared on May 31, 2016, the sum of the debit
column is:
A. Php120,000. B. Php156,000.
C. Php134,000. D. Some other amount.

_______13. On June 4, the balance in the Cash account is:

A. Php17,600. B. Php 5,000.
C. Php10,600. D. Some other amount.

_______14. On June 4, the balance in the Capital Stock account is?

A. Php86,400. B. Php97,600.
C. Php94,000. D. Some other amount.

_______15. In a trial balance prepared on June 4, the sum of the credit column
Is?
A. Php130,000. B. Php132,600.
C. Php127,000 D. Some other amount.

You’re done on this part. Great job! Congratulations!

References
Aliling, Leonardo E. (2013). Fundamentals of Basic Accounting. ISBN: 9789712365256. Rex
Bookstore Incorporated. Sampaloc, Manila.

Arganda, Cardenas-Atis, Del Rosario, Jr. (2007). Accounting Principles 1. 4th Edition. ISBN: 971-086-
736-9. National Bookstore. Mandaluyong City.

Ballada, Win Lu (2010). Basic Accounting Made Easy. 15th Edition. ISBN: 978-971-94493-8-6.
Chapters 1-15 DomDane Publishers and Made Easy Books. Sampaloc, Manila.

Beticon, Josefina L., Domingo, James Cristopher D. and Yabut, Fermin Antonio D. (2016).
Fundamentals of Accountancy, Business and Management 1 and 2 Textbook. ISBN: 978-971-07-3852-
6. Lexicon Press, Inc. Quezon City.

DepEd Curriculum Guide (2013). Fundamentals of Accountancy, Business and Management I for
Grade 11. K to 12 Senior High School ABM Specialized Subject. Second Semester. Pp 1-6. December
01, 2013. Pasig City, Manila.

DepEd Teacher’s Guide (2016). Fundamentals of Accountancy, Business and Management I. Teaching
Guide for Senior High School – Academic ABM. The Commission on Higher Education in collaboration
with the Philippine Normal University. Pp 1-187. EC-TEC Commercial. Quezon City.

Manuel, Zenaida Vera Cruz (2007). 21st Century Accounting Process – Basic Concepts and Procedures.
International Edition. ISBN: 978-971-93680-0-7. Raintree Trading and Publishing Incorporated.
Quezon City.

TESDA Training Regulations (2018). Health, Social and Other Community Development Services
Sector. Bookkeeping NC III. Pp 1-69. Taguig City.

Electronic Sources

https://www.accountancyknowledge.com/trial-balance-mcqs/

https://byjus.com/commerce/mcq-on-trial-balance/

https://www.slideshare.net/srinivasmethuku/topic-8-trial-balance

https://www.slideshare.net/shruti18997/trial-balance-28810484?next_slideshow=1
 Answer Key
Pre-Test:
Gauge:

Account Titles Debits Credits 1. B 9. A

2. C 10. B
Accounts Receivable 
3. A 11. D
Accounts Payable  4. B 12. C
Advances to employees  5. C 13. C
Advertising Expense  6. B 14. B
Allowance for bad debts  7. B 15 B
8. D
Capital 
Depreciation Expense 
Equipment 
Rentals 
Sales 
Purchase Return and Allowances 
Merchandise Inventory 
Supplies Expense 
Taxes Payable 
Interest Income 
Interest payable 
Furniture and Fixtures 
Prepaid Supplies 
Salaries and Wages 
Light, Power and Water 

Explore : J. Capital Php 535,000.00

Deepen:

Infinity Enterprise
Trial Balance
July 20xx

DEBIT CREDIT
Cash Php 13,400.00 Php
Accounts Receivable 66,500.00
Merchandise Inventory 10,000.00
Supplies 5,000.00
Accounts Payable 28,000.00
Juan Capital 33,500.00
Sales 105,650.00
Sales Return and Allowances 750.00
Purchases 61,500.00
Purchase Return & Allowances 1,750.00
Freight In 1,150.00
Freight Out 600.00
Salaries 10,000.00

TOTALS 168,900.00 168,900.00